Correlation Between ARDAGH METAL and Paragon GmbH

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

Diversification Opportunities for ARDAGH METAL and Paragon GmbH

-0.26

Correlation Coefficient

ARDAGH METAL  Paragon GmbH

Very good diversification

The 3 months correlation between ARDAGH and Paragon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and paragon GmbH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on paragon GmbH 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 Paragon GmbH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of paragon GmbH has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Paragon GmbH go up and down completely randomly.

Pair Corralation between ARDAGH METAL and Paragon GmbH

Assuming the 90 days horizon ARDAGH METAL is expected to generate 14.61 times less return on investment than Paragon GmbH. But when comparing it to its historical volatility, ARDAGH METAL PACDL 0001 is 2.66 times less risky than Paragon GmbH. It trades about 0.01 of its potential returns per unit of risk. paragon GmbH Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  204.00  in paragon GmbH Co on December 24, 2024 and sell it today you would earn a total of  28.00  from holding paragon GmbH Co or generate 13.73% return on investment over 90 days.

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

ARDAGH METAL PACDL 0001  vs.  paragon GmbH Co

ARDAGH METAL PACDL

Risk-Adjusted Performance

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 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.

paragon GmbH

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in paragon GmbH Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Paragon GmbH unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ARDAGH METAL and Paragon GmbH

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

The idea behind ARDAGH METAL PACDL 0001 and paragon GmbH Co 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 CEOs Directory module to screen CEOs from public companies around the world.