Correlation Between Good Natured and Ball

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

By analyzing existing cross correlation between good natured Products and Ball Corporation, you can compare the effects of market volatilities on Good Natured and Ball 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 Good Natured with a short position of Ball. Check out your portfolio center. Please also check ongoing floating volatility patterns of Good Natured and Ball.

Diversification Opportunities for Good Natured and Ball

0.02

Correlation Coefficient

Good Natured  Ball

Significant diversification

The 3 months correlation between Good and Ball is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding good natured Products and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and Good Natured 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 good natured Products are associated (or correlated) with Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of Good Natured i.e., Good Natured and Ball go up and down completely randomly.

Pair Corralation between Good Natured and Ball

Assuming the 90 days horizon good natured Products is expected to generate 10.4 times more return on investment than Ball. However, Good Natured is 10.4 times more volatile than Ball Corporation. It trades about 0.05 of its potential returns per unit of risk. Ball Corporation is currently generating about -0.12 per unit of risk. If you would invest  0.70  in good natured Products on September 16, 2024 and sell it today you would lose (0.16) from holding good natured Products or give up 22.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

good natured Products  vs.  Ball Corp.

good natured Products

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days good natured Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly conflicting basic indicators, Good Natured reported solid returns over the last few months and may actually be approaching a breakup point.

Ball

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ball Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Good Natured and Ball

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

The idea behind good natured Products and Ball Corporation 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.