Correlation Between Smurfit Kappa and SCG PACKAGING
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and SCG PACKAGING 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 SCG PACKAGING 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 SCG PACKAGING FGN , you can compare the effects of market volatilities on Smurfit Kappa and SCG PACKAGING 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 SCG PACKAGING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and SCG PACKAGING.
Diversification Opportunities for Smurfit Kappa and SCG PACKAGING
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Smurfit and SCG is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and SCG PACKAGING FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG PACKAGING FGN 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 SCG PACKAGING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG PACKAGING FGN has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and SCG PACKAGING go up and down completely randomly.
Pair Corralation between Smurfit Kappa and SCG PACKAGING
Assuming the 90 days horizon Smurfit Kappa Group is expected to generate 1.51 times more return on investment than SCG PACKAGING. However, Smurfit Kappa is 1.51 times more volatile than SCG PACKAGING FGN . It trades about 0.28 of its potential returns per unit of risk. SCG PACKAGING FGN is currently generating about -0.21 per unit of risk. If you would invest 4,054 in Smurfit Kappa Group on August 31, 2024 and sell it today you would earn a total of 1,086 from holding Smurfit Kappa Group or generate 26.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Smurfit Kappa Group vs. SCG PACKAGING FGN
Performance |
| Timeline |
| Smurfit Kappa Group |
| SCG PACKAGING FGN |
Smurfit Kappa and SCG PACKAGING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and SCG PACKAGING
The main advantage of trading using opposite Smurfit Kappa and SCG PACKAGING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, SCG PACKAGING 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 SCG PACKAGING will offset losses from the drop in SCG PACKAGING's long position.| Smurfit Kappa vs. Lion One Metals | Smurfit Kappa vs. ePlay Digital | Smurfit Kappa vs. Jacquet Metal Service | Smurfit Kappa vs. Playa Hotels Resorts |
| SCG PACKAGING vs. Packaging of | SCG PACKAGING vs. Smurfit Kappa Group | SCG PACKAGING vs. Superior Plus Corp | SCG PACKAGING vs. Origin Agritech |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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