Correlation Between Avery Dennison and Leisure Fund
Can any of the company-specific risk be diversified away by investing in both Avery Dennison and Leisure Fund 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 Leisure Fund 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 Leisure Fund Investor, you can compare the effects of market volatilities on Avery Dennison and Leisure Fund 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 Leisure Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avery Dennison and Leisure Fund.
Diversification Opportunities for Avery Dennison and Leisure Fund
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Avery and Leisure is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Avery Dennison Corp and Leisure Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leisure Fund Investor 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 Leisure Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leisure Fund Investor has no effect on the direction of Avery Dennison i.e., Avery Dennison and Leisure Fund go up and down completely randomly.
Pair Corralation between Avery Dennison and Leisure Fund
Considering the 90-day investment horizon Avery Dennison is expected to generate 309.42 times less return on investment than Leisure Fund. In addition to that, Avery Dennison is 1.45 times more volatile than Leisure Fund Investor. It trades about 0.0 of its total potential returns per unit of risk. Leisure Fund Investor is currently generating about 0.53 per unit of volatility. If you would invest 9,052 in Leisure Fund Investor on September 2, 2024 and sell it today you would earn a total of 728.00 from holding Leisure Fund Investor or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avery Dennison Corp vs. Leisure Fund Investor
Performance |
| Timeline |
| Avery Dennison Corp |
| Leisure Fund Investor |
Avery Dennison and Leisure Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avery Dennison and Leisure Fund
The main advantage of trading using opposite Avery Dennison and Leisure Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avery Dennison position performs unexpectedly, Leisure Fund 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 Leisure Fund will offset losses from the drop in Leisure Fund'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 |
| Leisure Fund vs. Retailing Fund Investor | Leisure Fund vs. Financial Services Fund | Leisure Fund vs. Banking Fund Investor | Leisure Fund vs. Health Care Fund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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