Correlation Between Superior Plus and Smurfit Kappa
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Smurfit Kappa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Smurfit Kappa Group, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Smurfit Kappa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Smurfit Kappa.
Diversification Opportunities for Superior Plus and Smurfit Kappa
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Smurfit is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Smurfit Kappa go up and down completely randomly.
Pair Corralation between Superior Plus and Smurfit Kappa
Assuming the 90 days horizon Superior Plus is expected to generate 2.91 times less return on investment than Smurfit Kappa. In addition to that, Superior Plus is 2.06 times more volatile than Smurfit Kappa Group. It trades about 0.02 of its total potential returns per unit of risk. Smurfit Kappa Group is currently generating about 0.15 per unit of volatility. If you would invest 4,740 in Smurfit Kappa Group on September 3, 2024 and sell it today you would earn a total of 330.00 from holding Smurfit Kappa Group or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Superior Plus Corp vs. Smurfit Kappa Group
Performance |
| Timeline |
| Superior Plus Corp |
| Smurfit Kappa Group |
Superior Plus and Smurfit Kappa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Smurfit Kappa
The main advantage of trading using opposite Superior Plus and Smurfit Kappa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. Collins Foods Limited | Superior Plus vs. Thai Beverage Public | Superior Plus vs. ADRIATIC METALS LS 013355 | Superior Plus vs. Lifeway Foods |
| Smurfit Kappa vs. AptarGroup | Smurfit Kappa vs. Superior Plus Corp | Smurfit Kappa vs. NMI Holdings | Smurfit Kappa vs. Origin Agritech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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