Correlation Between Corporacion America and Smurfit WestRock
Can any of the company-specific risk be diversified away by investing in both Corporacion America and Smurfit WestRock 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 Corporacion America and Smurfit WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporacion America Airports and Smurfit WestRock plc, you can compare the effects of market volatilities on Corporacion America and Smurfit WestRock 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 Corporacion America with a short position of Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion America and Smurfit WestRock.
Diversification Opportunities for Corporacion America and Smurfit WestRock
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporacion and Smurfit is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion America Airports and Smurfit WestRock plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smurfit WestRock plc and Corporacion America 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 Corporacion America Airports are associated (or correlated) with Smurfit WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smurfit WestRock plc has no effect on the direction of Corporacion America i.e., Corporacion America and Smurfit WestRock go up and down completely randomly.
Pair Corralation between Corporacion America and Smurfit WestRock
Given the investment horizon of 90 days Corporacion America is expected to generate 2.21 times less return on investment than Smurfit WestRock. In addition to that, Corporacion America is 1.35 times more volatile than Smurfit WestRock plc. It trades about 0.06 of its total potential returns per unit of risk. Smurfit WestRock plc is currently generating about 0.19 per unit of volatility. If you would invest 5,115 in Smurfit WestRock plc on September 2, 2024 and sell it today you would earn a total of 387.00 from holding Smurfit WestRock plc or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporacion America Airports vs. Smurfit WestRock plc
Performance |
| Timeline |
| Corporacion America |
| Smurfit WestRock plc |
Corporacion America and Smurfit WestRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion America and Smurfit WestRock
The main advantage of trading using opposite Corporacion America and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion America position performs unexpectedly, Smurfit WestRock 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 WestRock will offset losses from the drop in Smurfit WestRock's long position.| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Flughafen Zrich AG |
| Smurfit WestRock vs. Church Dwight | Smurfit WestRock vs. Keurig Dr Pepper | Smurfit WestRock vs. Suntory Beverage Food | Smurfit WestRock vs. Lincoln Electric Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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