Correlation Between ARDAGH METAL and Addtech AB
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Addtech AB 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 ARDAGH METAL and Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Addtech AB, you can compare the effects of market volatilities on ARDAGH METAL and Addtech AB 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 ARDAGH METAL with a short position of Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Addtech AB.
Diversification Opportunities for ARDAGH METAL and Addtech AB
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ARDAGH and Addtech is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 are associated (or correlated) with Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Addtech AB go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Addtech AB
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to generate 1.84 times more return on investment than Addtech AB. However, ARDAGH METAL is 1.84 times more volatile than Addtech AB. It trades about 0.25 of its potential returns per unit of risk. Addtech AB is currently generating about 0.11 per unit of risk. If you would invest 218.00 in ARDAGH METAL PACDL 0001 on April 20, 2025 and sell it today you would earn a total of 170.00 from holding ARDAGH METAL PACDL 0001 or generate 77.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Addtech AB
Performance |
Timeline |
ARDAGH METAL PACDL |
Addtech AB |
ARDAGH METAL and Addtech AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ARDAGH METAL and Addtech AB
The main advantage of trading using opposite ARDAGH METAL and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.ARDAGH METAL vs. Amcor plc | ARDAGH METAL vs. Amcor plc | ARDAGH METAL vs. Packaging of | ARDAGH METAL vs. Crown Holdings |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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