Correlation Between CCL Industries and Russel Metals

Can any of the company-specific risk be diversified away by investing in both CCL Industries and Russel Metals 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 Russel Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CCL Industries and Russel Metals, you can compare the effects of market volatilities on CCL Industries and Russel Metals 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 Russel Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Russel Metals.

Diversification Opportunities for CCL Industries and Russel Metals

0.76

Correlation Coefficient

CCL Industries  Russel Metals

Poor diversification

The 3 months correlation between CCL and Russel is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Russel Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russel Metals 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 Russel Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russel Metals has no effect on the direction of CCL Industries i.e., CCL Industries and Russel Metals go up and down completely randomly.

Pair Corralation between CCL Industries and Russel Metals

Assuming the 90 days trading horizon CCL Industries is expected to generate 1.12 times more return on investment than Russel Metals. However, CCL Industries is 1.12 times more volatile than Russel Metals. It trades about 0.2 of its potential returns per unit of risk. Russel Metals is currently generating about 0.22 per unit of risk. If you would invest  6,807  in CCL Industries on April 23, 2025 and sell it today you would earn a total of  1,112  from holding CCL Industries or generate 16.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

CCL Industries  vs.  Russel Metals

CCL Industries

Risk-Adjusted Performance

Solid

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.

Russel Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Russel Metals are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Russel Metals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CCL Industries and Russel Metals

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

The idea behind CCL Industries and Russel Metals 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.