Correlation Between Smurfit WestRock and IPower
Can any of the company-specific risk be diversified away by investing in both Smurfit WestRock and IPower 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 IPower 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 iPower Inc, you can compare the effects of market volatilities on Smurfit WestRock and IPower 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 IPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit WestRock and IPower.
Diversification Opportunities for Smurfit WestRock and IPower
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Smurfit and IPower is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit WestRock plc and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower 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 IPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iPower Inc has no effect on the direction of Smurfit WestRock i.e., Smurfit WestRock and IPower go up and down completely randomly.
Pair Corralation between Smurfit WestRock and IPower
Allowing for the 90-day total investment horizon Smurfit WestRock is expected to generate 2.0 times less return on investment than IPower. But when comparing it to its historical volatility, Smurfit WestRock plc is 3.25 times less risky than IPower. It trades about 0.07 of its potential returns per unit of risk. iPower Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 84.00 in iPower Inc on August 27, 2024 and sell it today you would lose (14.00) from holding iPower Inc or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.97% |
| Values | Daily Returns |
Smurfit WestRock plc vs. iPower Inc
Performance |
| Timeline |
| Smurfit WestRock plc |
| iPower Inc |
Smurfit WestRock and IPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit WestRock and IPower
The main advantage of trading using opposite Smurfit WestRock and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit WestRock position performs unexpectedly, IPower 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 IPower will offset losses from the drop in IPower's long position.| Smurfit WestRock vs. NETGEAR | Smurfit WestRock vs. Deluxe | Smurfit WestRock vs. BCE Inc | Smurfit WestRock vs. Freedom Internet Group |
| IPower vs. Hour Loop | IPower vs. Qurate Retail Series | IPower vs. MOGU Inc | IPower vs. Meiwu Technology Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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