Correlation Between Myers Industries and Ball

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

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

Diversification Opportunities for Myers Industries and Ball

0.68

Correlation Coefficient

Myers Industries  Ball

Poor diversification

The 3 months correlation between Myers and Ball is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Myers Industries and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and Myers Industries 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 Myers Industries are associated (or correlated) with Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of Myers Industries i.e., Myers Industries and Ball go up and down completely randomly.

Pair Corralation between Myers Industries and Ball

Considering the 90-day investment horizon Myers Industries is expected to generate 1.86 times more return on investment than Ball. However, Myers Industries is 1.86 times more volatile than Ball Corporation. It trades about 0.05 of its potential returns per unit of risk. Ball Corporation is currently generating about -0.32 per unit of risk. If you would invest  1,116  in Myers Industries on September 25, 2024 and sell it today you would earn a total of  24.00  from holding Myers Industries or generate 2.15% return on investment over 90 days.

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

Myers Industries  vs.  Ball Corp.

Myers Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Myers Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Myers Industries and Ball

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

The idea behind Myers Industries and Ball Corporation 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.