Correlation Between Ball and Myers Industries

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

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

Diversification Opportunities for Ball and Myers Industries

0.69

Correlation Coefficient

Ball  Myers Industries

Poor diversification

The 3 months correlation between Ball and Myers is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ball Corp. and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries and Ball 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 Ball Corporation are associated (or correlated) with Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of Ball i.e., Ball and Myers Industries go up and down completely randomly.

Pair Corralation between Ball and Myers Industries

Given the investment horizon of 90 days Ball Corporation is expected to generate 0.59 times more return on investment than Myers Industries. However, Ball Corporation is 1.7 times less risky than Myers Industries. It trades about -0.49 of its potential returns per unit of risk. Myers Industries is currently generating about -0.3 per unit of risk. If you would invest  5,799  in Ball Corporation on October 13, 2024 and sell it today you would lose (598.00) from holding Ball Corporation or give up 10.31% of portfolio value over 90 days.

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

Ball Corp.  vs.  Myers Industries

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 conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Myers Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Myers Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ball and Myers Industries

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

The idea behind Ball Corporation and Myers Industries 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.