Correlation Between Ardagh Group and Electronics Fund

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Can any of the company-specific risk be diversified away by investing in both Ardagh Group and Electronics Fund 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 Ardagh Group and Electronics Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardagh Group SA and Electronics Fund Class, you can compare the effects of market volatilities on Ardagh Group and Electronics Fund 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 Ardagh Group with a short position of Electronics Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardagh Group and Electronics Fund.

Diversification Opportunities for Ardagh Group and Electronics Fund

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Ardagh Group and Electronics Fund

If you would invest  19,347  in Electronics Fund Class on December 30, 2023 and sell it today you would earn a total of  13,201  from holding Electronics Fund Class or generate 68.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Ardagh Group SA  vs.  ELECTRONICS FUND CLASS

 Performance 
       Timeline  
Ardagh Group SA 

Risk-Adjusted Performance

0 of 100

 
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High
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.
Electronics Fund Class 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Electronics Fund Class are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Electronics Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Ardagh Group and Electronics Fund Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ardagh Group and Electronics Fund

The main advantage of trading using opposite Ardagh Group and Electronics Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardagh Group position performs unexpectedly, Electronics Fund 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 Electronics Fund will offset losses from the drop in Electronics Fund's long position.
The idea behind Ardagh Group SA and Electronics Fund Class 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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