Correlation Between Amcor PLC and Aristocrat Leisure
Can any of the company-specific risk be diversified away by investing in both Amcor PLC and Aristocrat Leisure 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 Amcor PLC and Aristocrat Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcor PLC and Aristocrat Leisure, you can compare the effects of market volatilities on Amcor PLC and Aristocrat Leisure 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 Amcor PLC with a short position of Aristocrat Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor PLC and Aristocrat Leisure.
Diversification Opportunities for Amcor PLC and Aristocrat Leisure
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amcor and Aristocrat is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amcor PLC and Aristocrat Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Leisure and Amcor PLC 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 Amcor PLC are associated (or correlated) with Aristocrat Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Leisure has no effect on the direction of Amcor PLC i.e., Amcor PLC and Aristocrat Leisure go up and down completely randomly.
Pair Corralation between Amcor PLC and Aristocrat Leisure
Assuming the 90 days trading horizon Amcor PLC is expected to generate 1.77 times less return on investment than Aristocrat Leisure. But when comparing it to its historical volatility, Amcor PLC is 1.27 times less risky than Aristocrat Leisure. It trades about 0.09 of its potential returns per unit of risk. Aristocrat Leisure is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,453 in Aristocrat Leisure on September 13, 2024 and sell it today you would earn a total of 250.00 from holding Aristocrat Leisure or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amcor PLC vs. Aristocrat Leisure
Performance |
| Timeline |
| Amcor PLC |
| Aristocrat Leisure |
Amcor PLC and Aristocrat Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcor PLC and Aristocrat Leisure
The main advantage of trading using opposite Amcor PLC and Aristocrat Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor PLC position performs unexpectedly, Aristocrat Leisure 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 Aristocrat Leisure will offset losses from the drop in Aristocrat Leisure's long position.| Amcor PLC vs. Hotel Property Investments | Amcor PLC vs. REGAL ASIAN INVESTMENTS | Amcor PLC vs. Dexus Convenience Retail | Amcor PLC vs. Argo Investments |
| Aristocrat Leisure vs. Energy Resources | Aristocrat Leisure vs. 88 Energy | Aristocrat Leisure vs. Amani Gold | Aristocrat Leisure vs. A1 Investments Resources |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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