Correlation Between International Paper and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both International Paper 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 International Paper and Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Paper and Amcor plc, you can compare the effects of market volatilities on International Paper 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 International Paper with a short position of Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Paper and Amcor Plc.
Diversification Opportunities for International Paper and Amcor Plc
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and Amcor is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding International Paper and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc and International Paper 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 International Paper 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 International Paper i.e., International Paper and Amcor Plc go up and down completely randomly.
Pair Corralation between International Paper and Amcor Plc
Allowing for the 90-day total investment horizon International Paper is expected to generate 0.89 times more return on investment than Amcor Plc. However, International Paper is 1.12 times less risky than Amcor Plc. It trades about 0.28 of its potential returns per unit of risk. Amcor plc is currently generating about -0.06 per unit of risk. If you would invest 5,509 in International Paper on September 1, 2024 and sell it today you would earn a total of 374.00 from holding International Paper or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Paper vs. Amcor plc
Performance |
| Timeline |
| International Paper |
| Amcor plc |
International Paper and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Paper and Amcor Plc
The main advantage of trading using opposite International Paper and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Paper 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.| International Paper vs. Sealed Air | International Paper vs. Avery Dennison Corp | International Paper vs. Sonoco Products | International Paper vs. Ball Corporation |
| Amcor Plc vs. Packaging Corp of | Amcor Plc vs. International Paper | Amcor Plc vs. Ball Corporation | Amcor Plc vs. Amcor PLC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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