Correlation Between Amcor PLC and Advanced Container

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

By analyzing existing cross correlation between Amcor PLC and Advanced Container Technologies, you can compare the effects of market volatilities on Amcor PLC and Advanced Container 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 Amcor PLC with a short position of Advanced Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor PLC and Advanced Container.

Diversification Opportunities for Amcor PLC and Advanced Container

0.53

Correlation Coefficient

Amcor PLC  Advanced Container

Very weak diversification

The 3 months correlation between Amcor and Advanced is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Amcor PLC and Advanced Container Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Container and Amcor PLC 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 Amcor PLC are associated (or correlated) with Advanced Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Container has no effect on the direction of Amcor PLC i.e., Amcor PLC and Advanced Container go up and down completely randomly.

Pair Corralation between Amcor PLC and Advanced Container

Given the investment horizon of 90 days Amcor PLC is expected to generate 0.24 times more return on investment than Advanced Container. However, Amcor PLC is 4.19 times less risky than Advanced Container. It trades about -0.1 of its potential returns per unit of risk. Advanced Container Technologies is currently generating about -0.12 per unit of risk. If you would invest  1,098  in Amcor PLC on September 14, 2024 and sell it today you would lose (109.00) from holding Amcor PLC or give up 9.93% of portfolio value over 90 days.

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

Amcor PLC  vs.  Advanced Container Technologie

Amcor PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amcor PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Advanced Container

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Container Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Amcor PLC and Advanced Container

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

The idea behind Amcor PLC and Advanced Container Technologies 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.