Correlation Between POWER METALS and ARDAGH METAL

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

By analyzing existing cross correlation between POWER METALS and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on POWER METALS 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 POWER METALS with a short position of ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWER METALS and ARDAGH METAL.

Diversification Opportunities for POWER METALS and ARDAGH METAL

0.79

Correlation Coefficient

POWER METALS  ARDAGH METAL

Poor diversification

The 3 months correlation between POWER and ARDAGH is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding POWER METALS and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL and POWER METALS 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 POWER METALS 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 PACDL has no effect on the direction of POWER METALS i.e., POWER METALS and ARDAGH METAL go up and down completely randomly.

Pair Corralation between POWER METALS and ARDAGH METAL

Assuming the 90 days trading horizon POWER METALS is expected to under-perform the ARDAGH METAL. In addition to that, POWER METALS is 1.02 times more volatile than ARDAGH METAL PACDL 0001. It trades about -0.15 of its total potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about 0.03 per unit of volatility. If you would invest  338.00  in ARDAGH METAL PACDL 0001 on August 31, 2024 and sell it today you would earn a total of  4.00  from holding ARDAGH METAL PACDL 0001 or generate 1.18% return on investment over 90 days.

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

POWER METALS  vs.  ARDAGH METAL PACDL 0001

POWER METALS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in POWER METALS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, POWER METALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

ARDAGH METAL PACDL

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ARDAGH METAL PACDL 0001 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, ARDAGH METAL may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with POWER METALS and ARDAGH METAL

The main advantage of trading using opposite POWER METALS and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWER METALS 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 POWER METALS and ARDAGH METAL PACDL 0001 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.