Correlation Between Smurfit WestRock and Nuvve Holding
Can any of the company-specific risk be diversified away by investing in both Smurfit WestRock and Nuvve Holding 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 Nuvve Holding 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 Nuvve Holding Corp, you can compare the effects of market volatilities on Smurfit WestRock and Nuvve Holding 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 Nuvve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit WestRock and Nuvve Holding.
Diversification Opportunities for Smurfit WestRock and Nuvve Holding
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Smurfit and Nuvve is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit WestRock plc and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp 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 Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of Smurfit WestRock i.e., Smurfit WestRock and Nuvve Holding go up and down completely randomly.
Pair Corralation between Smurfit WestRock and Nuvve Holding
Allowing for the 90-day total investment horizon Smurfit WestRock is expected to generate 2.05 times less return on investment than Nuvve Holding. But when comparing it to its historical volatility, Smurfit WestRock plc is 3.62 times less risky than Nuvve Holding. It trades about 0.05 of its potential returns per unit of risk. Nuvve Holding Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Nuvve Holding Corp on November 18, 2024 and sell it today you would lose (4.00) from holding Nuvve Holding Corp or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit WestRock plc vs. Nuvve Holding Corp
Performance |
| Timeline |
| Smurfit WestRock plc |
| Nuvve Holding Corp |
Smurfit WestRock and Nuvve Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit WestRock and Nuvve Holding
The main advantage of trading using opposite Smurfit WestRock and Nuvve Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit WestRock position performs unexpectedly, Nuvve Holding 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 Nuvve Holding will offset losses from the drop in Nuvve Holding's long position.| Smurfit WestRock vs. MOGU Inc | Smurfit WestRock vs. Western Digital | Smurfit WestRock vs. Lithia Motors | Smurfit WestRock vs. Coupang LLC |
| Nuvve Holding vs. ChargePoint Holdings | Nuvve Holding vs. Pet Acquisition LLC | Nuvve Holding vs. Ulta Beauty | Nuvve Holding vs. Best Buy 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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