Correlation Between Ball and SIG Combibloc
Can any of the company-specific risk be diversified away by investing in both Ball and SIG Combibloc 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 SIG Combibloc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ball Corporation and SIG Combibloc Group, you can compare the effects of market volatilities on Ball and SIG Combibloc 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 SIG Combibloc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ball and SIG Combibloc.
Diversification Opportunities for Ball and SIG Combibloc
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ball and SIG is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ball Corp. and SIG Combibloc Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIG Combibloc Group 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 SIG Combibloc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIG Combibloc Group has no effect on the direction of Ball i.e., Ball and SIG Combibloc go up and down completely randomly.
Pair Corralation between Ball and SIG Combibloc
Given the investment horizon of 90 days Ball Corporation is expected to under-perform the SIG Combibloc. But the stock apears to be less risky and, when comparing its historical volatility, Ball Corporation is 1.26 times less risky than SIG Combibloc. The stock trades about -0.12 of its potential returns per unit of risk. The SIG Combibloc Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,020 in SIG Combibloc Group on September 12, 2024 and sell it today you would lose (58.00) from holding SIG Combibloc Group or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ball Corp. vs. SIG Combibloc Group
Performance |
| Timeline |
| Ball |
| SIG Combibloc Group |
Ball and SIG Combibloc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ball and SIG Combibloc
The main advantage of trading using opposite Ball and SIG Combibloc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ball position performs unexpectedly, SIG Combibloc 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 SIG Combibloc will offset losses from the drop in SIG Combibloc's long position.| Ball vs. Graphic Packaging Holding | Ball vs. Silgan Holdings | Ball vs. Sonoco Products | Ball vs. Reynolds Consumer Products |
| SIG Combibloc vs. Covestro AG | SIG Combibloc vs. Acciona SA | SIG Combibloc vs. Topaz Energy Corp | SIG Combibloc vs. Evonik Industries AG |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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