Correlation Between CCL Industries and Codan

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

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

Diversification Opportunities for CCL Industries and Codan

0.35

Correlation Coefficient

CCL Industries  Codan

Weak diversification

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

Pair Corralation between CCL Industries and Codan

If you would invest  5,617  in CCL Industries on May 19, 2025 and sell it today you would earn a total of  221.00  from holding CCL Industries or generate 3.93% return on investment over 90 days.

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

CCL Industries  vs.  Codan Limited

CCL Industries

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CCL Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

Codan Limited

Risk-Adjusted Performance

Weakest

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

Pair Trading with CCL Industries and Codan

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

The idea behind CCL Industries and Codan Limited 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.