Correlation Between Primerica and Smurfit WestRock
Can any of the company-specific risk be diversified away by investing in both Primerica 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 Primerica and Smurfit WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primerica and Smurfit WestRock plc, you can compare the effects of market volatilities on Primerica 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 Primerica with a short position of Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primerica and Smurfit WestRock.
Diversification Opportunities for Primerica and Smurfit WestRock
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Primerica and Smurfit is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Primerica 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 Primerica 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 Primerica 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 Primerica i.e., Primerica and Smurfit WestRock go up and down completely randomly.
Pair Corralation between Primerica and Smurfit WestRock
Considering the 90-day investment horizon Primerica is expected to under-perform the Smurfit WestRock. But the stock apears to be less risky and, when comparing its historical volatility, Primerica is 1.94 times less risky than Smurfit WestRock. The stock trades about -0.16 of its potential returns per unit of risk. The Smurfit WestRock plc is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 5,445 in Smurfit WestRock plc on November 28, 2024 and sell it today you would lose (146.00) from holding Smurfit WestRock plc or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primerica vs. Smurfit WestRock plc
Performance |
| Timeline |
| Primerica |
| Smurfit WestRock plc |
Primerica and Smurfit WestRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primerica and Smurfit WestRock
The main advantage of trading using opposite Primerica and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primerica 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.| Primerica vs. CNO Financial Group | Primerica vs. Aflac Incorporated | Primerica vs. Prudential PLC ADR | Primerica vs. FG Annuities Life |
| Smurfit WestRock vs. Root Inc | Smurfit WestRock vs. Frontier Group Holdings | Smurfit WestRock vs. Cheche Group Class | Smurfit WestRock vs. Unum 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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