Correlation Between Ardagh Metal and Packaging Corp
Can any of the company-specific risk be diversified away by investing in both Ardagh Metal and Packaging Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ardagh Metal and Packaging Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardagh Metal Packaging and Packaging Corp of, you can compare the effects of market volatilities on Ardagh Metal and Packaging Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ardagh Metal with a short position of Packaging Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardagh Metal and Packaging Corp.
Diversification Opportunities for Ardagh Metal and Packaging Corp
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ardagh and Packaging is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ardagh Metal Packaging and Packaging Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging Corp and Ardagh Metal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ardagh Metal Packaging are associated (or correlated) with Packaging Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging Corp has no effect on the direction of Ardagh Metal i.e., Ardagh Metal and Packaging Corp go up and down completely randomly.
Pair Corralation between Ardagh Metal and Packaging Corp
Given the investment horizon of 90 days Ardagh Metal is expected to generate 5.49 times less return on investment than Packaging Corp. In addition to that, Ardagh Metal is 1.81 times more volatile than Packaging Corp of. It trades about 0.01 of its total potential returns per unit of risk. Packaging Corp of is currently generating about 0.1 per unit of volatility. If you would invest 12,682 in Packaging Corp of on August 28, 2024 and sell it today you would earn a total of 12,046 from holding Packaging Corp of or generate 94.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ardagh Metal Packaging vs. Packaging Corp of
Performance |
| Timeline |
| Ardagh Metal Packaging |
| Packaging Corp |
Ardagh Metal and Packaging Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardagh Metal and Packaging Corp
The main advantage of trading using opposite Ardagh Metal and Packaging Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardagh Metal position performs unexpectedly, Packaging Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Packaging Corp will offset losses from the drop in Packaging Corp's long position.| Ardagh Metal vs. Crown Holdings | Ardagh Metal vs. Amcor PLC | Ardagh Metal vs. Avery Dennison Corp | Ardagh Metal vs. Packaging Corp of |
| Packaging Corp vs. Avery Dennison Corp | Packaging Corp vs. O I Glass | Packaging Corp vs. Silgan Holdings | Packaging Corp vs. Sealed Air |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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