Correlation Between AptarGroup and Crown Holdings
Can any of the company-specific risk be diversified away by investing in both AptarGroup and Crown Holdings 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 AptarGroup and Crown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptarGroup and Crown Holdings, you can compare the effects of market volatilities on AptarGroup and Crown Holdings 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 AptarGroup with a short position of Crown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptarGroup and Crown Holdings.
Diversification Opportunities for AptarGroup and Crown Holdings
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AptarGroup and Crown is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Crown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Holdings and AptarGroup 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 AptarGroup are associated (or correlated) with Crown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Holdings has no effect on the direction of AptarGroup i.e., AptarGroup and Crown Holdings go up and down completely randomly.
Pair Corralation between AptarGroup and Crown Holdings
Considering the 90-day investment horizon AptarGroup is expected to generate 0.49 times more return on investment than Crown Holdings. However, AptarGroup is 2.03 times less risky than Crown Holdings. It trades about 0.25 of its potential returns per unit of risk. Crown Holdings is currently generating about -0.1 per unit of risk. If you would invest 12,324 in AptarGroup on December 29, 2023 and sell it today you would earn a total of 2,065 from holding AptarGroup or generate 16.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AptarGroup vs. Crown Holdings
Performance |
Timeline |
AptarGroup |
Crown Holdings |
AptarGroup and Crown Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AptarGroup and Crown Holdings
The main advantage of trading using opposite AptarGroup and Crown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptarGroup position performs unexpectedly, Crown Holdings 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 Crown Holdings will offset losses from the drop in Crown Holdings' long position.AptarGroup vs. Biglari Holdings | AptarGroup vs. Wizz Air Holdings | AptarGroup vs. Porvair Plc | AptarGroup vs. Alaska Air Group |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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