Correlation Between Packaging Corp and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both Packaging Corp 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 Packaging Corp 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 Corp of and Amcor plc, you can compare the effects of market volatilities on Packaging Corp 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 Packaging Corp with a short position of Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging Corp and Amcor Plc.
Diversification Opportunities for Packaging Corp and Amcor Plc
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Packaging and Amcor is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Packaging Corp of and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc and Packaging Corp 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 Corp 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 Packaging Corp i.e., Packaging Corp and Amcor Plc go up and down completely randomly.
Pair Corralation between Packaging Corp and Amcor Plc
Considering the 90-day investment horizon Packaging Corp of is expected to generate 0.78 times more return on investment than Amcor Plc. However, Packaging Corp of is 1.28 times less risky than Amcor Plc. It trades about 0.35 of its potential returns per unit of risk. Amcor plc is currently generating about 0.04 per unit of risk. If you would invest 23,017 in Packaging Corp of on September 3, 2024 and sell it today you would earn a total of 1,868 from holding Packaging Corp of or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging Corp of vs. Amcor plc
Performance |
| Timeline |
| Packaging Corp |
| Amcor plc |
Packaging Corp and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packaging Corp and Amcor Plc
The main advantage of trading using opposite Packaging Corp and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packaging Corp 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.| Packaging Corp vs. Avery Dennison Corp | Packaging Corp vs. O I Glass | Packaging Corp vs. Silgan Holdings | Packaging Corp vs. Sealed Air |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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