Correlation Between Pfizer and Smurfit Kappa
Can any of the company-specific risk be diversified away by investing in both Pfizer 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 Pfizer and Smurfit Kappa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Smurfit Kappa Group, you can compare the effects of market volatilities on Pfizer 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 Pfizer with a short position of Smurfit Kappa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Smurfit Kappa.
Diversification Opportunities for Pfizer and Smurfit Kappa
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pfizer and Smurfit is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc 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 Pfizer 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 Pfizer Inc 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 Pfizer i.e., Pfizer and Smurfit Kappa go up and down completely randomly.
Pair Corralation between Pfizer and Smurfit Kappa
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Smurfit Kappa. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 2.4 times less risky than Smurfit Kappa. The stock trades about -0.08 of its potential returns per unit of risk. The 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 Against |
| Strength | Weak |
| Accuracy | 86.46% |
| Values | Daily Returns |
Pfizer Inc vs. Smurfit Kappa Group
Performance |
| Timeline |
| Pfizer Inc |
| Smurfit Kappa Group |
Pfizer and Smurfit Kappa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Smurfit Kappa
The main advantage of trading using opposite Pfizer and Smurfit Kappa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer 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.| Pfizer vs. Merck Company | Pfizer vs. Johnson Johnson | Pfizer vs. Highway Holdings Limited | Pfizer vs. QCR Holdings |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |