Correlation Between CCL Industries and Open Text

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Can any of the company-specific risk be diversified away by investing in both CCL Industries and Open Text 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 Open Text into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Open Text Corp, you can compare the effects of market volatilities on CCL Industries and Open Text 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 Open Text. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Open Text.

Diversification Opportunities for CCL Industries and Open Text

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between CCL and Open is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Open Text Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Text Corp 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 Open Text. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Text Corp has no effect on the direction of CCL Industries i.e., CCL Industries and Open Text go up and down completely randomly.

Pair Corralation between CCL Industries and Open Text

Assuming the 90 days trading horizon CCL Industries is expected to generate 0.8 times more return on investment than Open Text. However, CCL Industries is 1.25 times less risky than Open Text. It trades about 0.2 of its potential returns per unit of risk. Open Text Corp is currently generating about 0.14 per unit of risk. If you would invest  6,836  in CCL Industries on April 21, 2025 and sell it today you would earn a total of  1,161  from holding CCL Industries or generate 16.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

CCL Industries  vs.  Open Text Corp

 Performance 
       Timeline  
CCL Industries 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CCL Industries are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, CCL Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.
Open Text Corp 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Open Text Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Open Text displayed solid returns over the last few months and may actually be approaching a breakup point.

CCL Industries and Open Text Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CCL Industries and Open Text

The main advantage of trading using opposite CCL Industries and Open Text positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Open Text 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 Open Text will offset losses from the drop in Open Text's long position.
The idea behind CCL Industries and Open Text Corp 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.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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