Correlation Between Ardagh and Stepan
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By analyzing existing cross correlation between Ardagh Holdings USA and Stepan Company, you can compare the effects of market volatilities on Ardagh and Stepan 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 Ardagh with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardagh and Stepan.
Diversification Opportunities for Ardagh and Stepan
Very good diversification
The 3 months correlation between Ardagh and Stepan is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ardagh Holdings USA and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and Ardagh 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 Ardagh Holdings USA are associated (or correlated) with Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Ardagh i.e., Ardagh and Stepan go up and down completely randomly.
Pair Corralation between Ardagh and Stepan
Assuming the 90 days trading horizon Ardagh Holdings USA is expected to generate 2.25 times more return on investment than Stepan. However, Ardagh is 2.25 times more volatile than Stepan Company. It trades about 0.01 of its potential returns per unit of risk. Stepan Company is currently generating about -0.02 per unit of risk. If you would invest 7,488 in Ardagh Holdings USA on August 28, 2024 and sell it today you would lose (357.00) from holding Ardagh Holdings USA or give up 4.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 74.16% |
| Values | Daily Returns |
Ardagh Holdings USA vs. Stepan Company
Performance |
| Timeline |
| Ardagh Holdings USA |
| Stepan Company |
Ardagh and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardagh and Stepan
The main advantage of trading using opposite Ardagh and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardagh position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.| Ardagh vs. Stepan Company | Ardagh vs. Teleflex Incorporated | Ardagh vs. Hawkins | Ardagh vs. Air Products and |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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