Correlation Between CCL Industries and Invesco SP
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Invesco SP 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 Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Invesco SP 500, you can compare the effects of market volatilities on CCL Industries and Invesco SP 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 Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Invesco SP.
Diversification Opportunities for CCL Industries and Invesco SP
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CCL and Invesco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 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 Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of CCL Industries i.e., CCL Industries and Invesco SP go up and down completely randomly.
Pair Corralation between CCL Industries and Invesco SP
Assuming the 90 days trading horizon CCL Industries is expected to under-perform the Invesco SP. In addition to that, CCL Industries is 1.07 times more volatile than Invesco SP 500. It trades about -0.08 of its total potential returns per unit of risk. Invesco SP 500 is currently generating about 0.25 per unit of volatility. If you would invest 2,495 in Invesco SP 500 on November 18, 2024 and sell it today you would earn a total of 143.00 from holding Invesco SP 500 or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Invesco SP 500
Performance |
| Timeline |
| CCL Industries |
| Invesco SP 500 |
CCL Industries and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Invesco SP
The main advantage of trading using opposite CCL Industries and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP's long position.| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
| Invesco SP vs. iShares SPTSX 60 | Invesco SP vs. iShares Core SP | Invesco SP vs. iShares Core SPTSX | Invesco SP vs. BMO Aggregate Bond |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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