Correlation Between Smurfit Kappa and CN YANGTPWR
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and CN YANGTPWR 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 CN YANGTPWR 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 CN YANGTPWR GDR, you can compare the effects of market volatilities on Smurfit Kappa and CN YANGTPWR 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 CN YANGTPWR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and CN YANGTPWR.
Diversification Opportunities for Smurfit Kappa and CN YANGTPWR
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Smurfit and CYZB is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and CN YANGTPWR GDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN YANGTPWR GDR 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 CN YANGTPWR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN YANGTPWR GDR has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and CN YANGTPWR go up and down completely randomly.
Pair Corralation between Smurfit Kappa and CN YANGTPWR
Assuming the 90 days horizon Smurfit Kappa Group is expected to under-perform the CN YANGTPWR. But the stock apears to be less risky and, when comparing its historical volatility, Smurfit Kappa Group is 1.48 times less risky than CN YANGTPWR. The stock trades about -0.04 of its potential returns per unit of risk. The CN YANGTPWR GDR is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,500 in CN YANGTPWR GDR on November 27, 2024 and sell it today you would earn a total of 700.00 from holding CN YANGTPWR GDR or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit Kappa Group vs. CN YANGTPWR GDR
Performance |
| Timeline |
| Smurfit Kappa Group |
| CN YANGTPWR GDR |
Smurfit Kappa and CN YANGTPWR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and CN YANGTPWR
The main advantage of trading using opposite Smurfit Kappa and CN YANGTPWR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, CN YANGTPWR 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 CN YANGTPWR will offset losses from the drop in CN YANGTPWR's long position.| Smurfit Kappa vs. Monster Beverage Corp | Smurfit Kappa vs. United Breweries Co | Smurfit Kappa vs. CanSino Biologics | Smurfit Kappa vs. Tsingtao Brewery |
| CN YANGTPWR vs. ON Semiconductor | CN YANGTPWR vs. Tower Semiconductor | CN YANGTPWR vs. MagnaChip Semiconductor Corp | CN YANGTPWR vs. MCEWEN MINING INC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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