Correlation Between Smurfit WestRock and ChargePoint Holdings
Can any of the company-specific risk be diversified away by investing in both Smurfit WestRock and ChargePoint Holdings 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 WestRock and ChargePoint Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smurfit WestRock plc and ChargePoint Holdings, you can compare the effects of market volatilities on Smurfit WestRock and ChargePoint Holdings 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 WestRock with a short position of ChargePoint Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit WestRock and ChargePoint Holdings.
Diversification Opportunities for Smurfit WestRock and ChargePoint Holdings
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smurfit and ChargePoint is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit WestRock plc and ChargePoint Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChargePoint Holdings and Smurfit WestRock 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 WestRock plc are associated (or correlated) with ChargePoint Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChargePoint Holdings has no effect on the direction of Smurfit WestRock i.e., Smurfit WestRock and ChargePoint Holdings go up and down completely randomly.
Pair Corralation between Smurfit WestRock and ChargePoint Holdings
Allowing for the 90-day total investment horizon Smurfit WestRock plc is expected to generate 0.61 times more return on investment than ChargePoint Holdings. However, Smurfit WestRock plc is 1.65 times less risky than ChargePoint Holdings. It trades about 0.06 of its potential returns per unit of risk. ChargePoint Holdings is currently generating about -0.06 per unit of risk. If you would invest 3,540 in Smurfit WestRock plc on August 27, 2024 and sell it today you would earn a total of 2,124 from holding Smurfit WestRock plc or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.75% |
| Values | Daily Returns |
Smurfit WestRock plc vs. ChargePoint Holdings
Performance |
| Timeline |
| Smurfit WestRock plc |
| ChargePoint Holdings |
Smurfit WestRock and ChargePoint Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit WestRock and ChargePoint Holdings
The main advantage of trading using opposite Smurfit WestRock and ChargePoint Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit WestRock position performs unexpectedly, ChargePoint Holdings 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 ChargePoint Holdings will offset losses from the drop in ChargePoint Holdings' long position.| Smurfit WestRock vs. NETGEAR | Smurfit WestRock vs. Deluxe | Smurfit WestRock vs. BCE Inc | Smurfit WestRock vs. Freedom Internet Group |
| ChargePoint Holdings vs. Pet Acquisition LLC | ChargePoint Holdings vs. Ulta Beauty | ChargePoint Holdings vs. Best Buy Co | ChargePoint Holdings vs. Dicks Sporting Goods |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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