Correlation Between Smurfit Kappa and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and Siemens Energy 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 Siemens Energy 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 Siemens Energy AG, you can compare the effects of market volatilities on Smurfit Kappa and Siemens Energy 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 Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and Siemens Energy.
Diversification Opportunities for Smurfit Kappa and Siemens Energy
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Smurfit and Siemens is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy AG 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 Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and Siemens Energy go up and down completely randomly.
Pair Corralation between Smurfit Kappa and Siemens Energy
Assuming the 90 days horizon Smurfit Kappa Group is expected to under-perform the Siemens Energy. But the stock apears to be less risky and, when comparing its historical volatility, Smurfit Kappa Group is 1.2 times less risky than Siemens Energy. The stock trades about -0.04 of its potential returns per unit of risk. The Siemens Energy AG is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,180 in Siemens Energy AG on November 27, 2024 and sell it today you would earn a total of 338.00 from holding Siemens Energy AG or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit Kappa Group vs. Siemens Energy AG
Performance |
| Timeline |
| Smurfit Kappa Group |
| Siemens Energy AG |
Smurfit Kappa and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and Siemens Energy
The main advantage of trading using opposite Smurfit Kappa and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, Siemens Energy 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 Siemens Energy will offset losses from the drop in Siemens Energy'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 |
| Siemens Energy vs. OPKO HEALTH | Siemens Energy vs. Molina Healthcare | Siemens Energy vs. Cardinal Health | Siemens Energy vs. Canadian Utilities Limited |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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