Correlation Between Avery Dennison and Amcor PLC
Can any of the company-specific risk be diversified away by investing in both Avery Dennison and Amcor PLC 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 Avery Dennison and Amcor PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avery Dennison Corp and Amcor PLC, you can compare the effects of market volatilities on Avery Dennison and Amcor PLC 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 Avery Dennison with a short position of Amcor PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avery Dennison and Amcor PLC.
Diversification Opportunities for Avery Dennison and Amcor PLC
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avery and Amcor is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Avery Dennison Corp and Amcor PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor PLC and Avery Dennison 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 Avery Dennison Corp are associated (or correlated) with Amcor PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor PLC has no effect on the direction of Avery Dennison i.e., Avery Dennison and Amcor PLC go up and down completely randomly.
Pair Corralation between Avery Dennison and Amcor PLC
Considering the 90-day investment horizon Avery Dennison Corp is expected to generate 0.43 times more return on investment than Amcor PLC. However, Avery Dennison Corp is 2.32 times less risky than Amcor PLC. It trades about 0.03 of its potential returns per unit of risk. Amcor PLC is currently generating about -0.08 per unit of risk. If you would invest 20,703 in Avery Dennison Corp on August 28, 2024 and sell it today you would earn a total of 91.00 from holding Avery Dennison Corp or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avery Dennison Corp vs. Amcor PLC
Performance |
| Timeline |
| Avery Dennison Corp |
| Amcor PLC |
Avery Dennison and Amcor PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avery Dennison and Amcor PLC
The main advantage of trading using opposite Avery Dennison and Amcor PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avery Dennison position performs unexpectedly, Amcor PLC 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 Amcor PLC will offset losses from the drop in Amcor PLC's long position.| Avery Dennison vs. Packaging Corp of | Avery Dennison vs. O I Glass | Avery Dennison vs. Silgan Holdings | Avery Dennison vs. Sealed Air |
| Amcor PLC vs. Crown Holdings | Amcor PLC vs. Avery Dennison Corp | Amcor PLC vs. Packaging Corp of | Amcor PLC 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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