Correlation Between Alliance Creative and Ball

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

By analyzing existing cross correlation between Alliance Creative Gr and Ball Corporation, you can compare the effects of market volatilities on Alliance Creative and Ball 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 Alliance Creative with a short position of Ball. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Creative and Ball.

Diversification Opportunities for Alliance Creative and Ball

0.2

Correlation Coefficient

Alliance Creative  Ball

Modest diversification

The 3 months correlation between Alliance and Ball is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Creative Gr and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and Alliance Creative 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 Alliance Creative Gr are associated (or correlated) with Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of Alliance Creative i.e., Alliance Creative and Ball go up and down completely randomly.

Pair Corralation between Alliance Creative and Ball

Given the investment horizon of 90 days Alliance Creative Gr is expected to under-perform the Ball. In addition to that, Alliance Creative is 8.87 times more volatile than Ball Corporation. It trades about -0.11 of its total potential returns per unit of risk. Ball Corporation is currently generating about -0.17 per unit of volatility. If you would invest  6,023  in Ball Corporation on September 21, 2024 and sell it today you would lose (396.50) from holding Ball Corporation or give up 6.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Alliance Creative Gr  vs.  Ball Corp.

Alliance Creative

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alliance Creative Gr are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, Alliance Creative showed solid returns over the last few months and may actually be approaching a breakup point.

Ball

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ball Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Alliance Creative and Ball

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

The idea behind Alliance Creative Gr and Ball Corporation 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.