Correlation Between Graphic Packaging and Smurfit WestRock
Can any of the company-specific risk be diversified away by investing in both Graphic Packaging 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 Graphic Packaging and Smurfit WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphic Packaging Holding and Smurfit WestRock plc, you can compare the effects of market volatilities on Graphic Packaging 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 Graphic Packaging with a short position of Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphic Packaging and Smurfit WestRock.
Diversification Opportunities for Graphic Packaging and Smurfit WestRock
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Graphic and Smurfit is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Graphic Packaging Holding 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 Graphic Packaging 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 Graphic Packaging Holding 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 Graphic Packaging i.e., Graphic Packaging and Smurfit WestRock go up and down completely randomly.
Pair Corralation between Graphic Packaging and Smurfit WestRock
Considering the 90-day investment horizon Graphic Packaging is expected to generate 2.61 times less return on investment than Smurfit WestRock. But when comparing it to its historical volatility, Graphic Packaging Holding is 1.96 times less risky than Smurfit WestRock. It trades about 0.08 of its potential returns per unit of risk. Smurfit WestRock plc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,428 in Smurfit WestRock plc on August 24, 2024 and sell it today you would earn a total of 2,209 from holding Smurfit WestRock plc or generate 64.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.69% |
| Values | Daily Returns |
Graphic Packaging Holding vs. Smurfit WestRock plc
Performance |
| Timeline |
| Graphic Packaging Holding |
| Smurfit WestRock plc |
Graphic Packaging and Smurfit WestRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphic Packaging and Smurfit WestRock
The main advantage of trading using opposite Graphic Packaging and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphic Packaging 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.| Graphic Packaging vs. Ball Corporation | Graphic Packaging vs. Silgan Holdings | Graphic Packaging vs. Sonoco Products | Graphic Packaging vs. Reynolds Consumer Products |
| Smurfit WestRock vs. ON Semiconductor | Smurfit WestRock vs. Everspin Technologies | Smurfit WestRock vs. Kulicke and Soffa | Smurfit WestRock vs. Advanced Micro Devices |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |