Correlation Between ARDAGH METAL and Haleon PLC

Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Haleon PLC 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 Haleon PLC 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 Haleon PLC, you can compare the effects of market volatilities on ARDAGH METAL and Haleon PLC 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 Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Haleon PLC.

Diversification Opportunities for ARDAGH METAL and Haleon PLC

-0.27

Correlation Coefficient

ARDAGH METAL  Haleon PLC

Very good diversification

The 3 months correlation between ARDAGH and Haleon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon PLC 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 Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Haleon PLC go up and down completely randomly.

Pair Corralation between ARDAGH METAL and Haleon PLC

Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Haleon PLC. In addition to that, ARDAGH METAL is 1.75 times more volatile than Haleon PLC. It trades about -0.03 of its total potential returns per unit of risk. Haleon PLC is currently generating about 0.1 per unit of volatility. If you would invest  706.00  in Haleon PLC on October 9, 2024 and sell it today you would earn a total of  194.00  from holding Haleon PLC or generate 27.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

ARDAGH METAL PACDL 0001  vs.  Haleon PLC

ARDAGH METAL PACDL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARDAGH METAL PACDL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Haleon PLC

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with ARDAGH METAL and Haleon PLC

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

The idea behind ARDAGH METAL PACDL 0001 and Haleon PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.