Correlation Between PRECISION DRILLING and Amcor Plc

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

By analyzing existing cross correlation between PRECISION DRILLING P and Amcor plc, you can compare the effects of market volatilities on PRECISION DRILLING and Amcor Plc 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 PRECISION DRILLING with a short position of Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRECISION DRILLING and Amcor Plc.

Diversification Opportunities for PRECISION DRILLING and Amcor Plc

-0.05

Correlation Coefficient

PRECISION DRILLING  Amcor Plc

Good diversification

The 3 months correlation between PRECISION and Amcor is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding PRECISION DRILLING P and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc and PRECISION DRILLING 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 PRECISION DRILLING P are associated (or correlated) with Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of PRECISION DRILLING i.e., PRECISION DRILLING and Amcor Plc go up and down completely randomly.

Pair Corralation between PRECISION DRILLING and Amcor Plc

Assuming the 90 days trading horizon PRECISION DRILLING is expected to generate 6.56 times less return on investment than Amcor Plc. But when comparing it to its historical volatility, PRECISION DRILLING P is 1.01 times less risky than Amcor Plc. It trades about 0.0 of its potential returns per unit of risk. Amcor plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  895.00  in Amcor plc on October 23, 2024 and sell it today you would earn a total of  20.00  from holding Amcor plc or generate 2.23% return on investment over 90 days.

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

PRECISION DRILLING P  vs.  Amcor plc

PRECISION DRILLING

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PRECISION DRILLING P are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, PRECISION DRILLING reported solid returns over the last few months and may actually be approaching a breakup point.

Amcor plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amcor plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amcor Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PRECISION DRILLING and Amcor Plc

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

The idea behind PRECISION DRILLING P and Amcor plc 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.