Correlation Between Crown Holdings and DSS

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

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

Diversification Opportunities for Crown Holdings and DSS

0.79

Correlation Coefficient

Crown Holdings  DSS

Poor diversification

The 3 months correlation between Crown and DSS is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Crown Holdings and DSS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSS Inc and Crown 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 Crown Holdings are associated (or correlated) with DSS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSS Inc has no effect on the direction of Crown Holdings i.e., Crown Holdings and DSS go up and down completely randomly.

Pair Corralation between Crown Holdings and DSS

Considering the 90-day investment horizon Crown Holdings is expected to generate 0.19 times more return on investment than DSS. However, Crown Holdings is 5.4 times less risky than DSS. It trades about -0.35 of its potential returns per unit of risk. DSS Inc is currently generating about -0.14 per unit of risk. If you would invest  9,375  in Crown Holdings on October 7, 2024 and sell it today you would lose (1,321) from holding Crown Holdings or give up 14.09% of portfolio value over 90 days.

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

Crown Holdings  vs.  DSS Inc

Crown Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Holdings 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 fundamental 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.

DSS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DSS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Crown Holdings and DSS

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

The idea behind Crown Holdings and DSS Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.