Correlation Between Sealed Air and Ardagh Metal
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and Ardagh Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Ardagh Metal Packaging, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of Ardagh Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Ardagh Metal.
Diversification Opportunities for Sealed Air and Ardagh Metal
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sealed and Ardagh is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Ardagh Metal Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardagh Metal Packaging and Sealed Air 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 Sealed Air 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 Packaging has no effect on the direction of Sealed Air i.e., Sealed Air and Ardagh Metal go up and down completely randomly.
Pair Corralation between Sealed Air and Ardagh Metal
Considering the 90-day investment horizon Sealed Air is expected to under-perform the Ardagh Metal. But the stock apears to be less risky and, when comparing its historical volatility, Sealed Air is 1.23 times less risky than Ardagh Metal. The stock trades about -0.02 of its potential returns per unit of risk. The Ardagh Metal Packaging is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 380.00 in Ardagh Metal Packaging on August 28, 2024 and sell it today you would lose (9.00) from holding Ardagh Metal Packaging or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Ardagh Metal Packaging
Performance |
| Timeline |
| Sealed Air |
| Ardagh Metal Packaging |
Sealed Air and Ardagh Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Ardagh Metal
The main advantage of trading using opposite Sealed Air and Ardagh Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Reynolds Consumer Products | Sealed Air vs. Ball Corporation |
| Ardagh Metal vs. Crown Holdings | Ardagh Metal vs. Amcor PLC | Ardagh Metal vs. Avery Dennison Corp | Ardagh Metal vs. Packaging Corp of |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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