Correlation Between ALUF Holdings and Amcor Plc

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

By analyzing existing cross correlation between ALUF Holdings and Amcor plc, you can compare the effects of market volatilities on ALUF Holdings and Amcor Plc 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 ALUF Holdings with a short position of Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALUF Holdings and Amcor Plc.

Diversification Opportunities for ALUF Holdings and Amcor Plc

-0.47

Correlation Coefficient

ALUF Holdings  Amcor Plc

Very good diversification

The 3 months correlation between ALUF and Amcor is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ALUF Holdings and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc and ALUF Holdings 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 ALUF Holdings are associated (or correlated) with Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of ALUF Holdings i.e., ALUF Holdings and Amcor Plc go up and down completely randomly.

Pair Corralation between ALUF Holdings and Amcor Plc

Given the investment horizon of 90 days ALUF Holdings is expected to generate 11.45 times more return on investment than Amcor Plc. However, ALUF Holdings is 11.45 times more volatile than Amcor plc. It trades about 0.05 of its potential returns per unit of risk. Amcor plc is currently generating about -0.02 per unit of risk. If you would invest  0.90  in ALUF Holdings on May 4, 2025 and sell it today you would lose (0.23) from holding ALUF Holdings or give up 25.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

ALUF Holdings  vs.  Amcor plc

ALUF Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ALUF Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, ALUF Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Amcor plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amcor plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Amcor Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ALUF Holdings and Amcor Plc

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

The idea behind ALUF Holdings and Amcor plc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.