Correlation Between ARDAGH METAL and PPHE HOTEL

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

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

Diversification Opportunities for ARDAGH METAL and PPHE HOTEL

-0.45

Correlation Coefficient

ARDAGH METAL  PPHE HOTEL

Very good diversification

The 3 months correlation between ARDAGH and PPHE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and PPHE HOTEL go up and down completely randomly.

Pair Corralation between ARDAGH METAL and PPHE HOTEL

Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the PPHE HOTEL. In addition to that, ARDAGH METAL is 2.0 times more volatile than PPHE HOTEL GROUP. It trades about -0.06 of its total potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.31 per unit of volatility. If you would invest  1,390  in PPHE HOTEL GROUP on September 17, 2024 and sell it today you would earn a total of  180.00  from holding PPHE HOTEL GROUP or generate 12.95% return on investment over 90 days.

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

ARDAGH METAL PACDL 0001  vs.  PPHE HOTEL GROUP

ARDAGH METAL PACDL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ARDAGH METAL PACDL 0001 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ARDAGH METAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PPHE HOTEL GROUP

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PPHE HOTEL GROUP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PPHE HOTEL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ARDAGH METAL and PPHE HOTEL

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

The idea behind ARDAGH METAL PACDL 0001 and PPHE HOTEL GROUP 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.