Correlation Between Packagingof America and TRADEDOUBLER

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

By analyzing existing cross correlation between Packaging of and TRADEDOUBLER AB SK, you can compare the effects of market volatilities on Packagingof America and TRADEDOUBLER 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 Packagingof America with a short position of TRADEDOUBLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packagingof America and TRADEDOUBLER.

Diversification Opportunities for Packagingof America and TRADEDOUBLER

0.18

Correlation Coefficient

Packagingof America  TRADEDOUBLER

Average diversification

The 3 months correlation between Packagingof and TRADEDOUBLER is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Packaging of and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK and Packagingof America 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 Packaging of are associated (or correlated) with TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Packagingof America i.e., Packagingof America and TRADEDOUBLER go up and down completely randomly.

Pair Corralation between Packagingof America and TRADEDOUBLER

Assuming the 90 days horizon Packaging of is expected to generate 0.37 times more return on investment than TRADEDOUBLER. However, Packaging of is 2.67 times less risky than TRADEDOUBLER. It trades about 0.14 of its potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about 0.05 per unit of risk. If you would invest  19,587  in Packaging of on October 10, 2024 and sell it today you would earn a total of  2,153  from holding Packaging of or generate 10.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Packaging of  vs.  TRADEDOUBLER AB SK

Packagingof America

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Packaging of are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Packagingof America may actually be approaching a critical reversion point that can send shares even higher in February 2025.

TRADEDOUBLER AB SK

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Packagingof America and TRADEDOUBLER

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

The idea behind Packaging of and TRADEDOUBLER AB SK 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.