Correlation Between Advanced Container and Ball

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

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

Diversification Opportunities for Advanced Container and Ball

0.61

Correlation Coefficient

Advanced Container  Ball

Poor diversification

The 3 months correlation between Advanced and Ball is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Container Technologie and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and Advanced Container 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 Advanced Container Technologies 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 Advanced Container i.e., Advanced Container and Ball go up and down completely randomly.

Pair Corralation between Advanced Container and Ball

Given the investment horizon of 90 days Advanced Container Technologies is expected to generate 32.91 times more return on investment than Ball. However, Advanced Container is 32.91 times more volatile than Ball Corporation. It trades about 0.07 of its potential returns per unit of risk. Ball Corporation is currently generating about 0.02 per unit of risk. If you would invest  33.00  in Advanced Container Technologies on September 21, 2024 and sell it today you would lose (32.99) from holding Advanced Container Technologies or give up 99.97% of portfolio value over 90 days.

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

Advanced Container Technologie  vs.  Ball Corp.

Advanced Container

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Container Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

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 Advanced Container and Ball

The main advantage of trading using opposite Advanced Container and Ball positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Container 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 Advanced Container Technologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.