Correlation Between CCL Industries and Geodrill
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Geodrill 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 CCL Industries and Geodrill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Geodrill Limited, you can compare the effects of market volatilities on CCL Industries and Geodrill 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 CCL Industries with a short position of Geodrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Geodrill.
Diversification Opportunities for CCL Industries and Geodrill
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CCL and Geodrill is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Geodrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geodrill Limited and CCL Industries 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 CCL Industries are associated (or correlated) with Geodrill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geodrill Limited has no effect on the direction of CCL Industries i.e., CCL Industries and Geodrill go up and down completely randomly.
Pair Corralation between CCL Industries and Geodrill
Assuming the 90 days trading horizon CCL Industries is expected to generate 1.34 times less return on investment than Geodrill. But when comparing it to its historical volatility, CCL Industries is 1.85 times less risky than Geodrill. It trades about 0.22 of its potential returns per unit of risk. Geodrill Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Geodrill Limited on April 24, 2025 and sell it today you would earn a total of 67.00 from holding Geodrill Limited or generate 22.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.41% |
Values | Daily Returns |
CCL Industries vs. Geodrill Limited
Performance |
Timeline |
CCL Industries |
Geodrill Limited |
CCL Industries and Geodrill Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CCL Industries and Geodrill
The main advantage of trading using opposite CCL Industries and Geodrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Geodrill 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 Geodrill will offset losses from the drop in Geodrill's long position.CCL Industries vs. CCL Industries | CCL Industries vs. Quebecor | CCL Industries vs. Winpak | CCL Industries vs. Restaurant Brands International |
Geodrill vs. Stria Lithium | Geodrill vs. Dynacor Gold Mines | Geodrill vs. Foraco International SA | Geodrill vs. Hammond Power Solutions |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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