Correlation Between Smurfit Kappa and Persimmon Plc
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and Persimmon Plc 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 Persimmon Plc 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 Persimmon Plc, you can compare the effects of market volatilities on Smurfit Kappa and Persimmon Plc 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 Persimmon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and Persimmon Plc.
Diversification Opportunities for Smurfit Kappa and Persimmon Plc
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Smurfit and Persimmon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Persimmon Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Persimmon Plc 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 Persimmon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Persimmon Plc has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and Persimmon Plc go up and down completely randomly.
Pair Corralation between Smurfit Kappa and Persimmon Plc
If you would invest (62.00) in Smurfit Kappa Group on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Smurfit Kappa Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Smurfit Kappa Group vs. Persimmon Plc
Performance |
| Timeline |
| Smurfit Kappa Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Persimmon Plc |
Smurfit Kappa and Persimmon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and Persimmon Plc
The main advantage of trading using opposite Smurfit Kappa and Persimmon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, Persimmon Plc 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 Persimmon Plc will offset losses from the drop in Persimmon Plc's long position.| Smurfit Kappa vs. Mondi PLC ADR | Smurfit Kappa vs. Persimmon Plc | Smurfit Kappa vs. Sonic Healthcare Ltd | Smurfit Kappa vs. Bunzl plc |
| Persimmon Plc vs. Barratt Developments PLC | Persimmon Plc vs. Cyrela Brazil Realty | Persimmon Plc vs. Barratt Developments plc | Persimmon Plc vs. Consorcio ARA S |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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