Correlation Between Ardagh Metal and TriMas
Can any of the company-specific risk be diversified away by investing in both Ardagh Metal and TriMas 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 TriMas 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 TriMas, you can compare the effects of market volatilities on Ardagh Metal and TriMas 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 TriMas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardagh Metal and TriMas.
Diversification Opportunities for Ardagh Metal and TriMas
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ardagh and TriMas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ardagh Metal Packaging and TriMas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriMas 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 TriMas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriMas has no effect on the direction of Ardagh Metal i.e., Ardagh Metal and TriMas go up and down completely randomly.
Pair Corralation between Ardagh Metal and TriMas
Given the investment horizon of 90 days Ardagh Metal Packaging is expected to generate 0.38 times more return on investment than TriMas. However, Ardagh Metal Packaging is 2.61 times less risky than TriMas. It trades about -0.03 of its potential returns per unit of risk. TriMas is currently generating about -0.04 per unit of risk. If you would invest 372.00 in Ardagh Metal Packaging on August 31, 2024 and sell it today you would lose (3.00) from holding Ardagh Metal Packaging or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ardagh Metal Packaging vs. TriMas
Performance |
| Timeline |
| Ardagh Metal Packaging |
| TriMas |
Ardagh Metal and TriMas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardagh Metal and TriMas
The main advantage of trading using opposite Ardagh Metal and TriMas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardagh Metal position performs unexpectedly, TriMas 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 TriMas will offset losses from the drop in TriMas' long position.| Ardagh Metal vs. Crown Holdings | Ardagh Metal vs. Amcor PLC | Ardagh Metal vs. Avery Dennison Corp | Ardagh Metal vs. Packaging Corp of |
| TriMas vs. Greif Bros | TriMas vs. Karat Packaging | TriMas vs. Reynolds Consumer Products | TriMas vs. Silgan Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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