Correlation Between CCL Industries and Corby Spirit

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

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

Diversification Opportunities for CCL Industries and Corby Spirit

0.35

Correlation Coefficient

CCL Industries  Corby Spirit

Weak diversification

The 3 months correlation between CCL and Corby is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Corby Spirit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corby Spirit 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 Corby Spirit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corby Spirit has no effect on the direction of CCL Industries i.e., CCL Industries and Corby Spirit go up and down completely randomly.

Pair Corralation between CCL Industries and Corby Spirit

Assuming the 90 days horizon CCL Industries is expected to under-perform the Corby Spirit. In addition to that, CCL Industries is 1.16 times more volatile than Corby Spirit and. It trades about -0.05 of its total potential returns per unit of risk. Corby Spirit and is currently generating about 0.0 per unit of volatility. If you would invest  1,013  in Corby Spirit and on July 5, 2025 and sell it today you would lose (2.00) from holding Corby Spirit and or give up 0.2% of portfolio value over 90 days.

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

CCL Industries  vs.  Corby Spirit and

CCL Industries

Risk-Adjusted Performance

Weakest

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

Corby Spirit

Risk-Adjusted Performance

Weakest

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

Pair Trading with CCL Industries and Corby Spirit

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

The idea behind CCL Industries and Corby Spirit and 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.