Correlation Between Smurfit Kappa and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and WAGNERS HOLDING 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 Smurfit Kappa and WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smurfit Kappa Group and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on Smurfit Kappa and WAGNERS HOLDING 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 Smurfit Kappa with a short position of WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and WAGNERS HOLDING.
Diversification Opportunities for Smurfit Kappa and WAGNERS HOLDING
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smurfit and WAGNERS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD and Smurfit Kappa 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 Smurfit Kappa Group are associated (or correlated) with WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between Smurfit Kappa and WAGNERS HOLDING
Assuming the 90 days horizon Smurfit Kappa Group is expected to under-perform the WAGNERS HOLDING. But the stock apears to be less risky and, when comparing its historical volatility, Smurfit Kappa Group is 1.72 times less risky than WAGNERS HOLDING. The stock trades about -0.1 of its potential returns per unit of risk. The WAGNERS HOLDING LTD is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 83.00 in WAGNERS HOLDING LTD on September 27, 2024 and sell it today you would lose (1.00) from holding WAGNERS HOLDING LTD or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit Kappa Group vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| Smurfit Kappa Group |
| WAGNERS HOLDING LTD |
Smurfit Kappa and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and WAGNERS HOLDING
The main advantage of trading using opposite Smurfit Kappa and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.| Smurfit Kappa vs. Amcor plc | Smurfit Kappa vs. Amcor plc | Smurfit Kappa vs. Packaging of | Smurfit Kappa vs. Crown Holdings |
| WAGNERS HOLDING vs. Tencent Music Entertainment | WAGNERS HOLDING vs. GAMING FAC SA | WAGNERS HOLDING vs. Seven West Media | WAGNERS HOLDING vs. Live Nation Entertainment |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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