Correlation Between Amcor PLC and Packaging Corp
Can any of the company-specific risk be diversified away by investing in both Amcor PLC 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 Amcor PLC and Packaging Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcor PLC and Packaging Corp of, you can compare the effects of market volatilities on Amcor PLC 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 Amcor PLC with a short position of Packaging Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor PLC and Packaging Corp.
Diversification Opportunities for Amcor PLC and Packaging Corp
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amcor and Packaging is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Amcor PLC and Packaging Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging Corp 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 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 Amcor PLC i.e., Amcor PLC and Packaging Corp go up and down completely randomly.
Pair Corralation between Amcor PLC and Packaging Corp
Given the investment horizon of 90 days Amcor PLC is expected to under-perform the Packaging Corp. In addition to that, Amcor PLC is 2.05 times more volatile than Packaging Corp of. It trades about -0.08 of its total potential returns per unit of risk. Packaging Corp of is currently generating about 0.35 per unit of volatility. If you would invest 22,745 in Packaging Corp of on August 28, 2024 and sell it today you would earn a total of 1,983 from holding Packaging Corp of or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amcor PLC vs. Packaging Corp of
Performance |
| Timeline |
| Amcor PLC |
| Packaging Corp |
Amcor PLC and Packaging Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcor PLC and Packaging Corp
The main advantage of trading using opposite Amcor PLC and Packaging Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor PLC 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.| Amcor PLC vs. Crown Holdings | Amcor PLC vs. Avery Dennison Corp | Amcor PLC vs. Packaging Corp of | Amcor PLC vs. Sealed Air |
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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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