Correlation Between Packagingof America and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both Packagingof America 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 Packagingof America and Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging of and Amcor plc, you can compare the effects of market volatilities on Packagingof America 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 Packagingof America with a short position of Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packagingof America and Amcor Plc.
Diversification Opportunities for Packagingof America and Amcor Plc
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Packagingof and Amcor is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Packaging of and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc and Packagingof America 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 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 Packagingof America i.e., Packagingof America and Amcor Plc go up and down completely randomly.
Pair Corralation between Packagingof America and Amcor Plc
Assuming the 90 days horizon Packaging of is expected to generate 1.18 times more return on investment than Amcor Plc. However, Packagingof America is 1.18 times more volatile than Amcor plc. It trades about 0.31 of its potential returns per unit of risk. Amcor plc is currently generating about 0.32 per unit of risk. If you would invest 21,030 in Packaging of on September 2, 2024 and sell it today you would earn a total of 2,270 from holding Packaging of or generate 10.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging of vs. Amcor plc
Performance |
| Timeline |
| Packagingof America |
| Amcor plc |
Packagingof America and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packagingof America and Amcor Plc
The main advantage of trading using opposite Packagingof America and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packagingof America 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.| Packagingof America vs. MTI WIRELESS EDGE | Packagingof America vs. Grupo Carso SAB | Packagingof America vs. Charter Communications | Packagingof America vs. CARSALESCOM |
| Amcor Plc vs. GREENX METALS LTD | Amcor Plc vs. ADRIATIC METALS LS 013355 | Amcor Plc vs. Mobilezone Holding AG | Amcor Plc vs. Spirent Communications 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |