Correlation Between Amcor Plc and Packaging
Can any of the company-specific risk be diversified away by investing in both Amcor Plc and Packaging 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 Amcor Plc and Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcor plc and Packaging of, you can compare the effects of market volatilities on Amcor Plc and Packaging 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 Amcor Plc with a short position of Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor Plc and Packaging.
Diversification Opportunities for Amcor Plc and Packaging
Very weak diversification
The 3 months correlation between Amcor and Packaging is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Amcor plc and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging and Amcor Plc 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 Amcor plc are associated (or correlated) with Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging has no effect on the direction of Amcor Plc i.e., Amcor Plc and Packaging go up and down completely randomly.
Pair Corralation between Amcor Plc and Packaging
Assuming the 90 days trading horizon Amcor Plc is expected to generate 4.39 times less return on investment than Packaging. But when comparing it to its historical volatility, Amcor plc is 1.09 times less risky than Packaging. It trades about 0.02 of its potential returns per unit of risk. Packaging of is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 16,099 in Packaging of on April 25, 2025 and sell it today you would earn a total of 1,381 from holding Packaging of or generate 8.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Amcor plc vs. Packaging of
Performance |
Timeline |
Amcor plc |
Packaging |
Amcor Plc and Packaging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amcor Plc and Packaging
The main advantage of trading using opposite Amcor Plc and Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor Plc position performs unexpectedly, Packaging 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 Packaging will offset losses from the drop in Packaging's long position.Amcor Plc vs. Take Two Interactive Software | Amcor Plc vs. PSI Software AG | Amcor Plc vs. Axway Software SA | Amcor Plc vs. Jupiter Fund Management |
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Check out your portfolio center.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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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