Correlation Between Packaging Corp and Smurfit WestRock
Can any of the company-specific risk be diversified away by investing in both Packaging Corp 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 Packaging Corp and Smurfit WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging Corp of and Smurfit WestRock plc, you can compare the effects of market volatilities on Packaging Corp 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 Packaging Corp with a short position of Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging Corp and Smurfit WestRock.
Diversification Opportunities for Packaging Corp and Smurfit WestRock
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Packaging and Smurfit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Packaging Corp of 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 Packaging Corp 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 Packaging Corp of 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 Packaging Corp i.e., Packaging Corp and Smurfit WestRock go up and down completely randomly.
Pair Corralation between Packaging Corp and Smurfit WestRock
Considering the 90-day investment horizon Packaging Corp is expected to generate 1.67 times less return on investment than Smurfit WestRock. But when comparing it to its historical volatility, Packaging Corp of is 2.62 times less risky than Smurfit WestRock. It trades about 0.16 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 Together |
| Strength | Significant |
| Accuracy | 72.4% |
| Values | Daily Returns |
Packaging Corp of vs. Smurfit WestRock plc
Performance |
| Timeline |
| Packaging Corp |
| Smurfit WestRock plc |
Packaging Corp and Smurfit WestRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packaging Corp and Smurfit WestRock
The main advantage of trading using opposite Packaging Corp and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packaging Corp 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.| Packaging Corp vs. Avery Dennison Corp | Packaging Corp vs. O I Glass | Packaging Corp vs. Silgan Holdings | Packaging Corp vs. Sealed Air |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges |