Correlation Between NYSE Composite and Smurfit Kappa
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Smurfit Kappa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Smurfit Kappa Group, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Smurfit Kappa. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Smurfit Kappa.
Diversification Opportunities for NYSE Composite and Smurfit Kappa
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Smurfit is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Smurfit Kappa go up and down completely randomly.
Pair Corralation between NYSE Composite and Smurfit Kappa
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.01 times less return on investment than Smurfit Kappa. But when comparing it to its historical volatility, NYSE Composite is 4.77 times less risky than Smurfit Kappa. It trades about 0.08 of its potential returns per unit of risk. Smurfit Kappa Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,479 in Smurfit Kappa Group on September 3, 2024 and sell it today you would earn a total of 2,023 from holding Smurfit Kappa Group or generate 58.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.46% |
| Values | Daily Returns |
NYSE Composite vs. Smurfit Kappa Group
Performance |
| Timeline |
NYSE Composite and Smurfit Kappa Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Smurfit Kappa Group
Pair trading matchups for Smurfit Kappa
Pair Trading with NYSE Composite and Smurfit Kappa
The main advantage of trading using opposite NYSE Composite and Smurfit Kappa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Smurfit Kappa vs. Sealed Air | Smurfit Kappa vs. Avery Dennison Corp | Smurfit Kappa vs. International Paper | Smurfit Kappa vs. Sonoco Products |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |