Correlation Between ARDAGH METAL and Packaging

Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Packaging 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 ARDAGH METAL and Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Packaging of, you can compare the effects of market volatilities on ARDAGH METAL and Packaging 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 METAL with a short position of Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Packaging.

Diversification Opportunities for ARDAGH METAL and Packaging

0.51

Correlation Coefficient

ARDAGH METAL  Packaging

Very weak diversification

The 3 months correlation between ARDAGH and Packaging is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging and ARDAGH METAL 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 METAL PACDL 0001 are associated (or correlated) with Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Packaging go up and down completely randomly.

Pair Corralation between ARDAGH METAL and Packaging

Assuming the 90 days horizon ARDAGH METAL is expected to generate 1.56 times less return on investment than Packaging. In addition to that, ARDAGH METAL is 2.73 times more volatile than Packaging of. It trades about 0.03 of its total potential returns per unit of risk. Packaging of is currently generating about 0.15 per unit of volatility. If you would invest  12,736  in Packaging of on September 12, 2024 and sell it today you would earn a total of  9,844  from holding Packaging of or generate 77.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ARDAGH METAL PACDL 0001  vs.  Packaging of

ARDAGH METAL PACDL

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ARDAGH METAL PACDL 0001 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ARDAGH METAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Packaging

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Packaging of are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Packaging reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ARDAGH METAL and Packaging

The main advantage of trading using opposite ARDAGH METAL and Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Packaging 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 Packaging will offset losses from the drop in Packaging's long position.

The idea behind ARDAGH METAL PACDL 0001 and Packaging of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.