Correlation Between Millennium Group and Ardagh Metal

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

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

Diversification Opportunities for Millennium Group and Ardagh Metal

-0.01

Correlation Coefficient

Millennium Group  Ardagh Metal

Good diversification

The 3 months correlation between Millennium and Ardagh is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Millennium Group International and Ardagh Metal Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardagh Metal Packaging and Millennium Group 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 Millennium Group International are associated (or correlated) with Ardagh Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardagh Metal Packaging has no effect on the direction of Millennium Group i.e., Millennium Group and Ardagh Metal go up and down completely randomly.

Pair Corralation between Millennium Group and Ardagh Metal

Given the investment horizon of 90 days Millennium Group International is expected to generate 5.12 times more return on investment than Ardagh Metal. However, Millennium Group is 5.12 times more volatile than Ardagh Metal Packaging. It trades about 0.07 of its potential returns per unit of risk. Ardagh Metal Packaging is currently generating about 0.0 per unit of risk. If you would invest  139.00  in Millennium Group International on December 22, 2024 and sell it today you would earn a total of  24.00  from holding Millennium Group International or generate 17.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Millennium Group International  vs.  Ardagh Metal Packaging

Millennium Group Int

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Millennium Group International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, Millennium Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ardagh Metal Packaging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ardagh Metal Packaging has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Ardagh Metal is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Millennium Group and Ardagh Metal

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

The idea behind Millennium Group International and Ardagh Metal Packaging 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.