Correlation Between Smurfit Kappa and Lexington Realty
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and Lexington Realty 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 Lexington Realty 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 Lexington Realty Trust, you can compare the effects of market volatilities on Smurfit Kappa and Lexington Realty 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 Lexington Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and Lexington Realty.
Diversification Opportunities for Smurfit Kappa and Lexington Realty
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Smurfit and Lexington is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Lexington Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexington Realty Trust 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 Lexington Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexington Realty Trust has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and Lexington Realty go up and down completely randomly.
Pair Corralation between Smurfit Kappa and Lexington Realty
Assuming the 90 days horizon Smurfit Kappa Group is expected to under-perform the Lexington Realty. In addition to that, Smurfit Kappa is 2.11 times more volatile than Lexington Realty Trust. It trades about -0.03 of its total potential returns per unit of risk. Lexington Realty Trust is currently generating about 0.13 per unit of volatility. If you would invest 795.00 in Lexington Realty Trust on November 28, 2024 and sell it today you would earn a total of 25.00 from holding Lexington Realty Trust or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit Kappa Group vs. Lexington Realty Trust
Performance |
| Timeline |
| Smurfit Kappa Group |
| Lexington Realty Trust |
Smurfit Kappa and Lexington Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and Lexington Realty
The main advantage of trading using opposite Smurfit Kappa and Lexington Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, Lexington Realty 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 Lexington Realty will offset losses from the drop in Lexington Realty's long position.| Smurfit Kappa vs. Bumrungrad Hospital PCL | Smurfit Kappa vs. CompuGroup Medical SE | Smurfit Kappa vs. Japan Medical Dynamic | Smurfit Kappa vs. CLOVER HEALTH INV |
| Lexington Realty vs. Geely Automobile Holdings | Lexington Realty vs. Molina Healthcare | Lexington Realty vs. T MOBILE US | Lexington Realty vs. CARDINAL HEALTH |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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