Correlation Between ITALIAN WINE and AptarGroup
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and AptarGroup 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 ITALIAN WINE and AptarGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and AptarGroup, you can compare the effects of market volatilities on ITALIAN WINE and AptarGroup 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 ITALIAN WINE with a short position of AptarGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and AptarGroup.
Diversification Opportunities for ITALIAN WINE and AptarGroup
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITALIAN and AptarGroup is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and ITALIAN WINE 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 ITALIAN WINE BRANDS are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and AptarGroup go up and down completely randomly.
Pair Corralation between ITALIAN WINE and AptarGroup
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the AptarGroup. In addition to that, ITALIAN WINE is 1.56 times more volatile than AptarGroup. It trades about 0.0 of its total potential returns per unit of risk. AptarGroup is currently generating about 0.08 per unit of volatility. If you would invest 9,881 in AptarGroup on August 30, 2024 and sell it today you would earn a total of 6,429 from holding AptarGroup or generate 65.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. AptarGroup
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| AptarGroup |
ITALIAN WINE and AptarGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and AptarGroup
The main advantage of trading using opposite ITALIAN WINE and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, AptarGroup 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 AptarGroup will offset losses from the drop in AptarGroup's long position.The idea behind ITALIAN WINE BRANDS and AptarGroup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AptarGroup vs. Jacquet Metal Service | AptarGroup vs. Check Point Software | AptarGroup vs. Computer And Technologies | AptarGroup vs. Amkor Technology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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