Correlation Between Suntory Beverage and Smurfit WestRock
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and Smurfit WestRock 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 Suntory Beverage and Smurfit WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Smurfit WestRock plc, you can compare the effects of market volatilities on Suntory Beverage and Smurfit WestRock 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 Suntory Beverage with a short position of Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Smurfit WestRock.
Diversification Opportunities for Suntory Beverage and Smurfit WestRock
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suntory and Smurfit is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Smurfit WestRock plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smurfit WestRock plc and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with Smurfit WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smurfit WestRock plc has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and Smurfit WestRock go up and down completely randomly.
Pair Corralation between Suntory Beverage and Smurfit WestRock
Assuming the 90 days horizon Suntory Beverage is expected to generate 7.58 times less return on investment than Smurfit WestRock. But when comparing it to its historical volatility, Suntory Beverage Food is 1.87 times less risky than Smurfit WestRock. It trades about 0.02 of its potential returns per unit of risk. Smurfit WestRock plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,717 in Smurfit WestRock plc on September 3, 2024 and sell it today you would earn a total of 1,794 from holding Smurfit WestRock plc or generate 48.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.26% |
| Values | Daily Returns |
Suntory Beverage Food vs. Smurfit WestRock plc
Performance |
| Timeline |
| Suntory Beverage Food |
| Smurfit WestRock plc |
Suntory Beverage and Smurfit WestRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Smurfit WestRock
The main advantage of trading using opposite Suntory Beverage and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, Smurfit WestRock 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 Smurfit WestRock will offset losses from the drop in Smurfit WestRock's long position.| Suntory Beverage vs. Secom Co Ltd | Suntory Beverage vs. Mitsubishi Estate Co | Suntory Beverage vs. Shimano Inc ADR | Suntory Beverage vs. Sumitomo Chemical Co |
| Smurfit WestRock vs. Barings BDC | Smurfit WestRock vs. Femasys | Smurfit WestRock vs. KeyCorp | Smurfit WestRock vs. LithiumBank Resources Corp |
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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