Correlation Between Ball and Good Natured
Can any of the company-specific risk be diversified away by investing in both Ball and Good Natured 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 Ball and Good Natured into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ball Corporation and good natured Products, you can compare the effects of market volatilities on Ball and Good Natured 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 Ball with a short position of Good Natured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ball and Good Natured.
Diversification Opportunities for Ball and Good Natured
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ball and Good is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ball Corp. and good natured Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on good natured Products and Ball 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 Ball Corporation are associated (or correlated) with Good Natured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of good natured Products has no effect on the direction of Ball i.e., Ball and Good Natured go up and down completely randomly.
Pair Corralation between Ball and Good Natured
Given the investment horizon of 90 days Ball is expected to generate 1.8 times less return on investment than Good Natured. But when comparing it to its historical volatility, Ball Corporation is 1.74 times less risky than Good Natured. It trades about 0.22 of its potential returns per unit of risk. good natured Products is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 0.50 in good natured Products on September 1, 2024 and sell it today you would earn a total of 0.04 from holding good natured Products or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Ball Corp. vs. good natured Products
Performance |
| Timeline |
| Ball |
| good natured Products |
Ball and Good Natured Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ball and Good Natured
The main advantage of trading using opposite Ball and Good Natured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ball position performs unexpectedly, Good Natured 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 Good Natured will offset losses from the drop in Good Natured's long position.| Ball vs. Graphic Packaging Holding | Ball vs. Silgan Holdings | Ball vs. Sonoco Products | Ball vs. Reynolds Consumer Products |
| Good Natured vs. Packaging Corp of | Good Natured vs. International Paper | Good Natured vs. Ball Corporation | Good Natured vs. Amcor plc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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