Correlation Between Crown Holdings and Ball
Can any of the company-specific risk be diversified away by investing in both Crown Holdings and Ball 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 Crown Holdings and Ball into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Holdings and Ball Corporation, you can compare the effects of market volatilities on Crown Holdings and Ball 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 Crown Holdings with a short position of Ball. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Holdings and Ball.
Diversification Opportunities for Crown Holdings and Ball
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crown and Ball is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Crown Holdings and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and Crown Holdings 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 Crown Holdings are associated (or correlated) with Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of Crown Holdings i.e., Crown Holdings and Ball go up and down completely randomly.
Pair Corralation between Crown Holdings and Ball
Considering the 90-day investment horizon Crown Holdings is expected to generate 0.79 times more return on investment than Ball. However, Crown Holdings is 1.27 times less risky than Ball. It trades about 0.27 of its potential returns per unit of risk. Ball Corporation is currently generating about -0.09 per unit of risk. If you would invest 8,002 in Crown Holdings on November 9, 2024 and sell it today you would earn a total of 733.00 from holding Crown Holdings or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Holdings vs. Ball Corp.
Performance |
| Timeline |
| Crown Holdings |
| Ball |
Crown Holdings and Ball Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Holdings and Ball
The main advantage of trading using opposite Crown Holdings and Ball positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Holdings position performs unexpectedly, Ball 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 Ball will offset losses from the drop in Ball's long position.| Crown Holdings vs. Amcor PLC | Crown Holdings vs. Avery Dennison Corp | Crown Holdings vs. Packaging Corp of | Crown Holdings vs. Sealed Air |
| Ball vs. Graphic Packaging Holding | Ball vs. Silgan Holdings | Ball vs. Sonoco Products | Ball vs. Reynolds Consumer Products |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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