Correlation Between Amcor Plc and Crown Holdings
Can any of the company-specific risk be diversified away by investing in both Amcor Plc and Crown Holdings 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 Crown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcor plc and Crown Holdings, you can compare the effects of market volatilities on Amcor Plc and Crown Holdings 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 Crown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor Plc and Crown Holdings.
Diversification Opportunities for Amcor Plc and Crown Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amcor and Crown is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Amcor plc and Crown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Holdings 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 Crown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Holdings has no effect on the direction of Amcor Plc i.e., Amcor Plc and Crown Holdings go up and down completely randomly.
Pair Corralation between Amcor Plc and Crown Holdings
Assuming the 90 days horizon Amcor plc is expected to generate 2.19 times more return on investment than Crown Holdings. However, Amcor Plc is 2.19 times more volatile than Crown Holdings. It trades about -0.23 of its potential returns per unit of risk. Crown Holdings is currently generating about -0.57 per unit of risk. If you would invest 977.00 in Amcor plc on September 26, 2024 and sell it today you would lose (96.00) from holding Amcor plc or give up 9.83% 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. Crown Holdings
Performance |
Timeline |
Amcor plc |
Crown Holdings |
Amcor Plc and Crown Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amcor Plc and Crown Holdings
The main advantage of trading using opposite Amcor Plc and Crown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor Plc position performs unexpectedly, Crown Holdings 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 Crown Holdings will offset losses from the drop in Crown Holdings' long position.Amcor Plc vs. Amcor plc | Amcor Plc vs. Packaging of | Amcor Plc vs. Crown Holdings | Amcor Plc vs. Smurfit Kappa Group |
Crown Holdings vs. Amcor plc | Crown Holdings vs. Amcor plc | Crown Holdings vs. Packaging of | Crown Holdings vs. Smurfit Kappa Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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