Correlation Between Packaging and Verallia Société
Can any of the company-specific risk be diversified away by investing in both Packaging and Verallia Société 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 Packaging and Verallia Société into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging of and Verallia Socit Anonyme, you can compare the effects of market volatilities on Packaging and Verallia Société 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 Packaging with a short position of Verallia Société. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging and Verallia Société.
Diversification Opportunities for Packaging and Verallia Société
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Packaging and Verallia is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Packaging of and Verallia Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verallia Socit Anonyme and Packaging 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 Packaging of are associated (or correlated) with Verallia Société. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verallia Socit Anonyme has no effect on the direction of Packaging i.e., Packaging and Verallia Société go up and down completely randomly.
Pair Corralation between Packaging and Verallia Société
Assuming the 90 days horizon Packaging of is expected to generate 0.71 times more return on investment than Verallia Société. However, Packaging of is 1.41 times less risky than Verallia Société. It trades about 0.1 of its potential returns per unit of risk. Verallia Socit Anonyme is currently generating about -0.01 per unit of risk. If you would invest 11,401 in Packaging of on September 14, 2024 and sell it today you would earn a total of 11,229 from holding Packaging of or generate 98.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Packaging of vs. Verallia Socit Anonyme
Performance |
| Timeline |
| Packaging |
| Verallia Socit Anonyme |
Packaging and Verallia Société Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packaging and Verallia Société
The main advantage of trading using opposite Packaging and Verallia Société positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packaging position performs unexpectedly, Verallia Société 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 Verallia Société will offset losses from the drop in Verallia Société's long position.| Packaging vs. ADRIATIC METALS LS 013355 | Packaging vs. Scientific Games | Packaging vs. Evolution Mining Limited | Packaging vs. TSOGO SUN GAMING |
| Verallia Société vs. Packaging of | Verallia Société vs. Graphic Packaging Holding | Verallia Société vs. Superior Plus Corp | Verallia Société vs. SIVERS SEMICONDUCTORS AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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