Correlation Between Crown Holdings and O I

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

By analyzing existing cross correlation between Crown Holdings and O I Glass, you can compare the effects of market volatilities on Crown Holdings and O I 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 O I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Holdings and O I.

Diversification Opportunities for Crown Holdings and O I

0.86

Correlation Coefficient

Crown Holdings  O I

Very poor diversification

The 3 months correlation between Crown and O I is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Crown Holdings and O I Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O I Glass 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 O I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O I Glass has no effect on the direction of Crown Holdings i.e., Crown Holdings and O I go up and down completely randomly.

Pair Corralation between Crown Holdings and O I

Considering the 90-day investment horizon Crown Holdings is expected to generate 0.59 times more return on investment than O I. However, Crown Holdings is 1.7 times less risky than O I. It trades about -0.07 of its potential returns per unit of risk. O I Glass is currently generating about -0.07 per unit of risk. If you would invest  9,209  in Crown Holdings on November 28, 2024 and sell it today you would lose (528.00) from holding Crown Holdings or give up 5.73% of portfolio value over 90 days.

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

Crown Holdings  vs.  O I Glass

Crown Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Crown Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

O I Glass

Risk-Adjusted Performance

Very Weak

Over the last 90 days O I Glass has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Crown Holdings and O I

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

The idea behind Crown Holdings and O I Glass 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.