Correlation Between Amer Sports, and Amcor PLC

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

By analyzing existing cross correlation between Amer Sports, and Amcor PLC, you can compare the effects of market volatilities on Amer Sports, and Amcor 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 Amer Sports, with a short position of Amcor PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Amcor PLC.

Diversification Opportunities for Amer Sports, and Amcor PLC

-0.75

Correlation Coefficient

Amer Sports,  Amcor PLC

Pay attention - limited upside

The 3 months correlation between Amer and Amcor is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Amcor PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor PLC and Amer Sports, 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 Amer Sports, are associated (or correlated) with Amcor PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor PLC has no effect on the direction of Amer Sports, i.e., Amer Sports, and Amcor PLC go up and down completely randomly.

Pair Corralation between Amer Sports, and Amcor PLC

Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 2.54 times more return on investment than Amcor PLC. However, Amer Sports, is 2.54 times more volatile than Amcor PLC. It trades about 0.4 of its potential returns per unit of risk. Amcor PLC is currently generating about -0.14 per unit of risk. If you would invest  1,805  in Amer Sports, on October 7, 2024 and sell it today you would earn a total of  1,144  from holding Amer Sports, or generate 63.38% return on investment over 90 days.

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

Amer Sports,  vs.  Amcor PLC

Amer Sports,

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amcor PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amcor PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Amer Sports, and Amcor PLC

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

The idea behind Amer Sports, and Amcor 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.

Check out your portfolio center.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.