Correlation Between CCL Industries and ATCO
Can any of the company-specific risk be diversified away by investing in both CCL Industries and ATCO 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 ATCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and ATCO, you can compare the effects of market volatilities on CCL Industries and ATCO 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 ATCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and ATCO.
Diversification Opportunities for CCL Industries and ATCO
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CCL and ATCO is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and ATCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATCO 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 ATCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATCO has no effect on the direction of CCL Industries i.e., CCL Industries and ATCO go up and down completely randomly.
Pair Corralation between CCL Industries and ATCO
Assuming the 90 days trading horizon CCL Industries is expected to generate 1.25 times less return on investment than ATCO. But when comparing it to its historical volatility, CCL Industries is 1.21 times less risky than ATCO. It trades about 0.04 of its potential returns per unit of risk. ATCO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,924 in ATCO on September 1, 2024 and sell it today you would earn a total of 1,305 from holding ATCO or generate 33.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. ATCO
Performance |
| Timeline |
| CCL Industries |
| ATCO |
CCL Industries and ATCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and ATCO
The main advantage of trading using opposite CCL Industries and ATCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, ATCO 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 ATCO will offset losses from the drop in ATCO's long position.| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
| ATCO vs. Computer Modelling Group | ATCO vs. Richelieu Hardware | ATCO vs. Economic Investment Trust | ATCO vs. Highwood Asset Management |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |