Correlation Between Amcor Plc and Smurfit Kappa
Can any of the company-specific risk be diversified away by investing in both Amcor Plc and Smurfit Kappa 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 Amcor Plc and Smurfit Kappa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcor plc and Smurfit Kappa Group, you can compare the effects of market volatilities on Amcor Plc and Smurfit Kappa 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 Amcor Plc with a short position of Smurfit Kappa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor Plc and Smurfit Kappa.
Diversification Opportunities for Amcor Plc and Smurfit Kappa
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amcor and Smurfit is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Amcor plc and Smurfit Kappa Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smurfit Kappa Group and Amcor Plc 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 Amcor plc are associated (or correlated) with Smurfit Kappa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smurfit Kappa Group has no effect on the direction of Amcor Plc i.e., Amcor Plc and Smurfit Kappa go up and down completely randomly.
Pair Corralation between Amcor Plc and Smurfit Kappa
Assuming the 90 days trading horizon Amcor plc is expected to generate 0.43 times more return on investment than Smurfit Kappa. However, Amcor plc is 2.34 times less risky than Smurfit Kappa. It trades about 0.28 of its potential returns per unit of risk. Smurfit Kappa Group is currently generating about -0.04 per unit of risk. If you would invest 905.00 in Amcor plc on November 27, 2024 and sell it today you would earn a total of 55.00 from holding Amcor plc or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amcor plc vs. Smurfit Kappa Group
Performance |
| Timeline |
| Amcor plc |
| Smurfit Kappa Group |
Amcor Plc and Smurfit Kappa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcor Plc and Smurfit Kappa
The main advantage of trading using opposite Amcor Plc and Smurfit Kappa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor Plc position performs unexpectedly, Smurfit Kappa 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 Smurfit Kappa will offset losses from the drop in Smurfit Kappa's long position.| Amcor Plc vs. PKSHA TECHNOLOGY INC | Amcor Plc vs. BW OFFSHORE LTD | Amcor Plc vs. EBRO FOODS | Amcor Plc vs. SBM OFFSHORE |
| Smurfit Kappa vs. Monster Beverage Corp | Smurfit Kappa vs. United Breweries Co | Smurfit Kappa vs. CanSino Biologics | Smurfit Kappa vs. Tsingtao Brewery |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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