Correlation Between CCL Industries and Spartan Delta
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Spartan Delta 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 CCL Industries and Spartan Delta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Spartan Delta Corp, you can compare the effects of market volatilities on CCL Industries and Spartan Delta 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 CCL Industries with a short position of Spartan Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Spartan Delta.
Diversification Opportunities for CCL Industries and Spartan Delta
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CCL and Spartan is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Spartan Delta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spartan Delta Corp and CCL Industries 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 CCL Industries are associated (or correlated) with Spartan Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spartan Delta Corp has no effect on the direction of CCL Industries i.e., CCL Industries and Spartan Delta go up and down completely randomly.
Pair Corralation between CCL Industries and Spartan Delta
Assuming the 90 days trading horizon CCL Industries is expected to generate 0.55 times more return on investment than Spartan Delta. However, CCL Industries is 1.82 times less risky than Spartan Delta. It trades about 0.05 of its potential returns per unit of risk. Spartan Delta Corp is currently generating about -0.03 per unit of risk. If you would invest 6,240 in CCL Industries on September 2, 2024 and sell it today you would earn a total of 1,559 from holding CCL Industries or generate 24.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Spartan Delta Corp
Performance |
| Timeline |
| CCL Industries |
| Spartan Delta Corp |
CCL Industries and Spartan Delta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Spartan Delta
The main advantage of trading using opposite CCL Industries and Spartan Delta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Spartan Delta 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 Spartan Delta will offset losses from the drop in Spartan Delta's long position.| CCL Industries vs. CCL Industries | CCL Industries vs. Quebecor | CCL Industries vs. Winpak | CCL Industries vs. Restaurant Brands International |
| Spartan Delta vs. Headwater Exploration | Spartan Delta vs. Topaz Energy Corp | Spartan Delta vs. Pine Cliff Energy | Spartan Delta vs. Journey Energy |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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