Correlation Between Guess and Smurfit WestRock
Can any of the company-specific risk be diversified away by investing in both Guess 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 Guess and Smurfit WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guess Inc and Smurfit WestRock plc, you can compare the effects of market volatilities on Guess 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 Guess with a short position of Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guess and Smurfit WestRock.
Diversification Opportunities for Guess and Smurfit WestRock
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guess and Smurfit is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Guess Inc 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 Guess 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 Guess Inc 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 Guess i.e., Guess and Smurfit WestRock go up and down completely randomly.
Pair Corralation between Guess and Smurfit WestRock
Considering the 90-day investment horizon Guess Inc is expected to under-perform the Smurfit WestRock. But the stock apears to be less risky and, when comparing its historical volatility, Guess Inc is 1.27 times less risky than Smurfit WestRock. The stock trades about -0.01 of its potential returns per unit of risk. The Smurfit WestRock plc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,217 in Smurfit WestRock plc on August 27, 2024 and sell it today you would earn a total of 1,447 from holding Smurfit WestRock plc or generate 34.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 71.61% |
| Values | Daily Returns |
Guess Inc vs. Smurfit WestRock plc
Performance |
| Timeline |
| Guess Inc |
| Smurfit WestRock plc |
Guess and Smurfit WestRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guess and Smurfit WestRock
The main advantage of trading using opposite Guess and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guess 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.The idea behind Guess Inc and Smurfit WestRock plc 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.| Smurfit WestRock vs. NETGEAR | Smurfit WestRock vs. Deluxe | Smurfit WestRock vs. BCE Inc | Smurfit WestRock vs. Freedom Internet Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets |