Correlation Between Driven Brands and Amcor PLC
Can any of the company-specific risk be diversified away by investing in both Driven Brands and Amcor PLC 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 Driven Brands and Amcor PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Driven Brands Holdings and Amcor PLC, you can compare the effects of market volatilities on Driven Brands and Amcor PLC 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 Driven Brands with a short position of Amcor PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and Amcor PLC.
Diversification Opportunities for Driven Brands and Amcor PLC
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Driven and Amcor is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and Amcor PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor PLC and Driven Brands 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 Driven Brands Holdings are associated (or correlated) with Amcor PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor PLC has no effect on the direction of Driven Brands i.e., Driven Brands and Amcor PLC go up and down completely randomly.
Pair Corralation between Driven Brands and Amcor PLC
Given the investment horizon of 90 days Driven Brands Holdings is expected to generate 1.95 times more return on investment than Amcor PLC. However, Driven Brands is 1.95 times more volatile than Amcor PLC. It trades about 0.05 of its potential returns per unit of risk. Amcor PLC is currently generating about 0.05 per unit of risk. If you would invest 1,310 in Driven Brands Holdings on August 24, 2024 and sell it today you would earn a total of 358.00 from holding Driven Brands Holdings or generate 27.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Driven Brands Holdings vs. Amcor PLC
Performance |
| Timeline |
| Driven Brands Holdings |
| Amcor PLC |
Driven Brands and Amcor PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Driven Brands and Amcor PLC
The main advantage of trading using opposite Driven Brands and Amcor PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driven Brands position performs unexpectedly, Amcor PLC 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 Amcor PLC will offset losses from the drop in Amcor PLC's long position.| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
| Amcor PLC vs. Crown Holdings | Amcor PLC vs. Avery Dennison Corp | Amcor PLC vs. Packaging Corp of | Amcor PLC vs. Sealed Air |
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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