Correlation Between Pactiv Evergreen and Ball

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

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

Diversification Opportunities for Pactiv Evergreen and Ball

-0.61

Correlation Coefficient

Pactiv Evergreen  Ball

Excellent diversification

The 3 months correlation between Pactiv and Ball is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pactiv Evergreen and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and Pactiv Evergreen 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 Pactiv Evergreen 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 Pactiv Evergreen i.e., Pactiv Evergreen and Ball go up and down completely randomly.

Pair Corralation between Pactiv Evergreen and Ball

Given the investment horizon of 90 days Pactiv Evergreen is expected to generate 2.54 times more return on investment than Ball. However, Pactiv Evergreen is 2.54 times more volatile than Ball Corporation. It trades about 0.43 of its potential returns per unit of risk. Ball Corporation is currently generating about -0.2 per unit of risk. If you would invest  1,209  in Pactiv Evergreen on September 14, 2024 and sell it today you would earn a total of  517.00  from holding Pactiv Evergreen or generate 42.76% return on investment over 90 days.

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

Pactiv Evergreen  vs.  Ball Corp.

Pactiv Evergreen

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pactiv Evergreen are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Pactiv Evergreen exhibited 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 conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Pactiv Evergreen and Ball

The main advantage of trading using opposite Pactiv Evergreen and Ball positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pactiv Evergreen 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 Pactiv Evergreen 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.