Correlation Between Smurfit Kappa and Dr Ing
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and Dr Ing 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 Dr Ing 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 Dr Ing hcF, you can compare the effects of market volatilities on Smurfit Kappa and Dr Ing 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 Dr Ing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and Dr Ing.
Diversification Opportunities for Smurfit Kappa and Dr Ing
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Smurfit and P911 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Dr Ing hcF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Ing hcF 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 Dr Ing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Ing hcF has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and Dr Ing go up and down completely randomly.
Pair Corralation between Smurfit Kappa and Dr Ing
Assuming the 90 days horizon Smurfit Kappa Group is expected to generate 1.37 times more return on investment than Dr Ing. However, Smurfit Kappa is 1.37 times more volatile than Dr Ing hcF. It trades about 0.06 of its potential returns per unit of risk. Dr Ing hcF is currently generating about -0.09 per unit of risk. If you would invest 3,195 in Smurfit Kappa Group on September 2, 2024 and sell it today you would earn a total of 1,875 from holding Smurfit Kappa Group or generate 58.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Smurfit Kappa Group vs. Dr Ing hcF
Performance |
| Timeline |
| Smurfit Kappa Group |
| Dr Ing hcF |
Smurfit Kappa and Dr Ing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and Dr Ing
The main advantage of trading using opposite Smurfit Kappa and Dr Ing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, Dr Ing 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 Dr Ing will offset losses from the drop in Dr Ing's long position.| Smurfit Kappa vs. CN MODERN DAIRY | Smurfit Kappa vs. Mitsubishi Materials | Smurfit Kappa vs. Beyond Meat | Smurfit Kappa vs. VULCAN MATERIALS |
| Dr Ing vs. CN MODERN DAIRY | Dr Ing vs. PREMIER FOODS | Dr Ing vs. AM EAGLE OUTFITTERS | Dr Ing vs. Thai Beverage Public |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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