Correlation Between BigBearai Holdings and Ardagh

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

By analyzing existing cross correlation between BigBearai Holdings and Ardagh Packaging Finance, you can compare the effects of market volatilities on BigBearai Holdings and Ardagh 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 BigBearai Holdings with a short position of Ardagh. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and Ardagh.

Diversification Opportunities for BigBearai Holdings and Ardagh

-0.81

Correlation Coefficient

BigBearai Holdings  Ardagh

Pay attention - limited upside

The 3 months correlation between BigBearai and Ardagh is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Ardagh Packaging Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardagh Packaging Finance and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Ardagh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardagh Packaging Finance has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Ardagh go up and down completely randomly.

Pair Corralation between BigBearai Holdings and Ardagh

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 2.44 times more return on investment than Ardagh. However, BigBearai Holdings is 2.44 times more volatile than Ardagh Packaging Finance. It trades about 0.06 of its potential returns per unit of risk. Ardagh Packaging Finance is currently generating about 0.02 per unit of risk. If you would invest  186.00  in BigBearai Holdings on October 7, 2024 and sell it today you would earn a total of  267.00  from holding BigBearai Holdings or generate 143.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	87.1%
Values	Daily Returns

BigBearai Holdings  vs.  Ardagh Packaging Finance

BigBearai Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ardagh Packaging Finance

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ardagh Packaging Finance are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ardagh sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BigBearai Holdings and Ardagh

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

The idea behind BigBearai Holdings and Ardagh Packaging Finance 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.