Correlation Between Ardagh Group and Greif Bros

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

By analyzing existing cross correlation between Ardagh Group SA and Greif Bros, you can compare the effects of market volatilities on Ardagh Group and Greif Bros 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 Group with a short position of Greif Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardagh Group and Greif Bros.

Diversification Opportunities for Ardagh Group and Greif Bros

0.0

Correlation Coefficient

Ardagh Group  Greif Bros

Pay attention - limited upside

The 3 months correlation between Ardagh and Greif is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ardagh Group SA and Greif Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Bros and Ardagh Group 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 Group SA are associated (or correlated) with Greif Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Bros has no effect on the direction of Ardagh Group i.e., Ardagh Group and Greif Bros go up and down completely randomly.

Pair Corralation between Ardagh Group and Greif Bros

If you would invest  5,960  in Greif Bros on January 19, 2024 and sell it today you would earn a total of  162.50  from holding Greif Bros or generate 2.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ardagh Group SA  vs.  Greif Bros

Ardagh Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardagh Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ardagh Group is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Greif Bros

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ardagh Group and Greif Bros

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

The idea behind Ardagh Group SA and Greif Bros 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.