Correlation Between LANXESS Aktiengesellscha and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both LANXESS Aktiengesellscha and ARDAGH METAL 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 LANXESS Aktiengesellscha and ARDAGH METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LANXESS Aktiengesellschaft and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on LANXESS Aktiengesellscha and ARDAGH METAL 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 LANXESS Aktiengesellscha with a short position of ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LANXESS Aktiengesellscha and ARDAGH METAL.
Diversification Opportunities for LANXESS Aktiengesellscha and ARDAGH METAL
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LANXESS and ARDAGH is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding LANXESS Aktiengesellschaft and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellschaft are associated (or correlated) with ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of LANXESS Aktiengesellscha i.e., LANXESS Aktiengesellscha and ARDAGH METAL go up and down completely randomly.
Pair Corralation between LANXESS Aktiengesellscha and ARDAGH METAL
Assuming the 90 days horizon LANXESS Aktiengesellschaft is expected to under-perform the ARDAGH METAL. But the stock apears to be less risky and, when comparing its historical volatility, LANXESS Aktiengesellschaft is 1.55 times less risky than ARDAGH METAL. The stock trades about -0.04 of its potential returns per unit of risk. The ARDAGH METAL PACDL 0001 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 407.00 in ARDAGH METAL PACDL 0001 on September 3, 2024 and sell it today you would lose (67.00) from holding ARDAGH METAL PACDL 0001 or give up 16.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LANXESS Aktiengesellschaft vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| LANXESS Aktiengesellscha |
| ARDAGH METAL PACDL |
LANXESS Aktiengesellscha and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LANXESS Aktiengesellscha and ARDAGH METAL
The main advantage of trading using opposite LANXESS Aktiengesellscha and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANXESS Aktiengesellscha position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| LANXESS Aktiengesellscha vs. Western Copper and | LANXESS Aktiengesellscha vs. Amkor Technology | LANXESS Aktiengesellscha vs. LION ONE METALS | LANXESS Aktiengesellscha vs. MCEWEN MINING INC |
| ARDAGH METAL vs. AptarGroup | ARDAGH METAL vs. Superior Plus Corp | ARDAGH METAL vs. NMI Holdings | ARDAGH METAL vs. Origin Agritech |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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