Correlation Between Smurfit Kappa and OCEAN GEOLOOP
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and OCEAN GEOLOOP 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 OCEAN GEOLOOP 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 OCEAN GEOLOOP AS NK, you can compare the effects of market volatilities on Smurfit Kappa and OCEAN GEOLOOP 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 OCEAN GEOLOOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and OCEAN GEOLOOP.
Diversification Opportunities for Smurfit Kappa and OCEAN GEOLOOP
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Smurfit and OCEAN is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and OCEAN GEOLOOP AS NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCEAN GEOLOOP AS 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 OCEAN GEOLOOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCEAN GEOLOOP AS has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and OCEAN GEOLOOP go up and down completely randomly.
Pair Corralation between Smurfit Kappa and OCEAN GEOLOOP
Assuming the 90 days horizon Smurfit Kappa Group is expected to generate 0.33 times more return on investment than OCEAN GEOLOOP. However, Smurfit Kappa Group is 3.03 times less risky than OCEAN GEOLOOP. It trades about 0.18 of its potential returns per unit of risk. OCEAN GEOLOOP AS NK is currently generating about -0.15 per unit of risk. If you would invest 4,645 in Smurfit Kappa Group on September 2, 2024 and sell it today you would earn a total of 425.00 from holding Smurfit Kappa Group or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Smurfit Kappa Group vs. OCEAN GEOLOOP AS NK
Performance |
| Timeline |
| Smurfit Kappa Group |
| OCEAN GEOLOOP AS |
Smurfit Kappa and OCEAN GEOLOOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and OCEAN GEOLOOP
The main advantage of trading using opposite Smurfit Kappa and OCEAN GEOLOOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, OCEAN GEOLOOP 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 OCEAN GEOLOOP will offset losses from the drop in OCEAN GEOLOOP's long position.| Smurfit Kappa vs. CN MODERN DAIRY | Smurfit Kappa vs. Mitsubishi Materials | Smurfit Kappa vs. Beyond Meat | Smurfit Kappa vs. VULCAN MATERIALS |
| OCEAN GEOLOOP vs. VIRGIN WINES UK | OCEAN GEOLOOP vs. SEI INVESTMENTS | OCEAN GEOLOOP vs. AOYAMA TRADING | OCEAN GEOLOOP vs. CARSALESCOM |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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