Correlation Between Keg Royalties and CCL Industries

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

By analyzing existing cross correlation between The Keg Royalties and CCL Industries, you can compare the effects of market volatilities on Keg Royalties and CCL Industries 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 Keg Royalties with a short position of CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keg Royalties and CCL Industries.

Diversification Opportunities for Keg Royalties and CCL Industries

0.9

Correlation Coefficient

Keg Royalties  CCL Industries

Almost no diversification

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

Pair Corralation between Keg Royalties and CCL Industries

Assuming the 90 days trading horizon The Keg Royalties is expected to generate 2.91 times more return on investment than CCL Industries. However, Keg Royalties is 2.91 times more volatile than CCL Industries. It trades about 0.15 of its potential returns per unit of risk. CCL Industries is currently generating about 0.22 per unit of risk. If you would invest  1,386  in The Keg Royalties on April 24, 2025 and sell it today you would earn a total of  476.00  from holding The Keg Royalties or generate 34.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

The Keg Royalties  vs.  CCL Industries

Keg Royalties

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Keg Royalties are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Keg Royalties sustained solid returns over the last few months and may actually be approaching a breakup point.

CCL Industries

Risk-Adjusted Performance

Solid

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

Pair Trading with Keg Royalties and CCL Industries

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

The idea behind The Keg Royalties and CCL Industries 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 CEOs Directory module to screen CEOs from public companies around the world.