Correlation Between Smurfit WestRock and Greif
Can any of the company-specific risk be diversified away by investing in both Smurfit WestRock and Greif 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 Greif 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 Greif Inc, you can compare the effects of market volatilities on Smurfit WestRock and Greif 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 Greif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit WestRock and Greif.
Diversification Opportunities for Smurfit WestRock and Greif
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smurfit and Greif is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit WestRock plc and Greif Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Inc 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 Greif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Inc has no effect on the direction of Smurfit WestRock i.e., Smurfit WestRock and Greif go up and down completely randomly.
Pair Corralation between Smurfit WestRock and Greif
Allowing for the 90-day total investment horizon Smurfit WestRock is expected to generate 1.1 times less return on investment than Greif. In addition to that, Smurfit WestRock is 1.09 times more volatile than Greif Inc. It trades about 0.23 of its total potential returns per unit of risk. Greif Inc is currently generating about 0.28 per unit of volatility. If you would invest 6,756 in Greif Inc on August 31, 2024 and sell it today you would earn a total of 760.00 from holding Greif Inc or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit WestRock plc vs. Greif Inc
Performance |
| Timeline |
| Smurfit WestRock plc |
| Greif Inc |
Smurfit WestRock and Greif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit WestRock and Greif
The main advantage of trading using opposite Smurfit WestRock and Greif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit WestRock position performs unexpectedly, Greif 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 Greif will offset losses from the drop in Greif's long position.| Smurfit WestRock vs. Corporacion America Airports | Smurfit WestRock vs. Pentair PLC | Smurfit WestRock vs. ON Semiconductor | Smurfit WestRock vs. Valens |
| Greif vs. Pactiv Evergreen | Greif vs. Myers Industries | Greif vs. Silgan Holdings | Greif vs. Sonoco Products |
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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