Correlation Between Ball and Ardagh Group

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

By analyzing existing cross correlation between Ball Corporation and Ardagh Group SA, you can compare the effects of market volatilities on Ball and Ardagh Group 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 Ball with a short position of Ardagh Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ball and Ardagh Group.

Diversification Opportunities for Ball and Ardagh Group

0.0

Correlation Coefficient

Ball  Ardagh Group

Pay attention - limited upside

The 3 months correlation between Ball and Ardagh is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ball Corp. and Ardagh Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardagh Group SA and Ball 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 Ball Corporation are associated (or correlated) with Ardagh Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardagh Group SA has no effect on the direction of Ball i.e., Ball and Ardagh Group go up and down completely randomly.

Pair Corralation between Ball and Ardagh Group

If you would invest (100.00) in Ardagh Group SA on January 24, 2024 and sell it today you would earn a total of  100.00  from holding Ardagh Group SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ball Corp.  vs.  Ardagh Group SA

Ball

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ball Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Ball is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Ardagh Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardagh Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ardagh Group is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ball and Ardagh Group

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

The idea behind Ball Corporation and Ardagh Group SA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..