Correlation Between Ball and SIG Combibloc

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

By analyzing existing cross correlation between Ball Corporation and SIG Combibloc Group, you can compare the effects of market volatilities on Ball and SIG Combibloc 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 SIG Combibloc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ball and SIG Combibloc.

Diversification Opportunities for Ball and SIG Combibloc

0.61

Correlation Coefficient

Ball  SIG Combibloc

Poor diversification

The 3 months correlation between Ball and SIG is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ball Corp. and SIG Combibloc Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIG Combibloc Group 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 SIG Combibloc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIG Combibloc Group has no effect on the direction of Ball i.e., Ball and SIG Combibloc go up and down completely randomly.

Pair Corralation between Ball and SIG Combibloc

Given the investment horizon of 90 days Ball Corporation is expected to under-perform the SIG Combibloc. In addition to that, Ball is 1.96 times more volatile than SIG Combibloc Group. It trades about -0.34 of its total potential returns per unit of risk. SIG Combibloc Group is currently generating about 0.05 per unit of volatility. If you would invest  1,962  in SIG Combibloc Group on October 12, 2024 and sell it today you would earn a total of  9.00  from holding SIG Combibloc Group or generate 0.46% return on investment over 90 days.

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

Ball Corp.  vs.  SIG Combibloc Group

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.

SIG Combibloc Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIG Combibloc Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ball and SIG Combibloc

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

The idea behind Ball Corporation and SIG Combibloc Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.