Correlation Between CCL Industries and ARDAGH METAL

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

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

Diversification Opportunities for CCL Industries and ARDAGH METAL

0.41

Correlation Coefficient

CCL Industries  ARDAGH METAL

Very weak diversification

The 3 months correlation between CCL and ARDAGH is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL and CCL Industries 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 CCL Industries are associated (or correlated) with ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of CCL Industries i.e., CCL Industries and ARDAGH METAL go up and down completely randomly.

Pair Corralation between CCL Industries and ARDAGH METAL

Assuming the 90 days horizon CCL Industries is expected to generate 8.35 times less return on investment than ARDAGH METAL. But when comparing it to its historical volatility, CCL Industries is 2.67 times less risky than ARDAGH METAL. It trades about 0.03 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  304.00  in ARDAGH METAL PACDL 0001 on August 30, 2024 and sell it today you would earn a total of  42.00  from holding ARDAGH METAL PACDL 0001 or generate 13.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

CCL Industries  vs.  ARDAGH METAL PACDL 0001

CCL Industries

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CCL Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CCL Industries is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ARDAGH METAL PACDL

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ARDAGH METAL PACDL 0001 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ARDAGH METAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CCL Industries and ARDAGH METAL

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

The idea behind CCL Industries and ARDAGH METAL PACDL 0001 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.