Correlation Between Smurfit Kappa and Amcor Plc

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Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and Amcor Plc 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 Kappa and Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smurfit Kappa Group and Amcor Plc, you can compare the effects of market volatilities on Smurfit Kappa and Amcor Plc 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 Kappa with a short position of Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and Amcor Plc.

Diversification Opportunities for Smurfit Kappa and Amcor Plc

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Smurfit and Amcor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Amcor Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor Plc and Smurfit Kappa 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 Kappa Group are associated (or correlated) with Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor Plc has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and Amcor Plc go up and down completely randomly.

Pair Corralation between Smurfit Kappa and Amcor Plc

If you would invest  4,100  in Smurfit Kappa Group on December 30, 2023 and sell it today you would earn a total of  385.00  from holding Smurfit Kappa Group or generate 9.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

Smurfit Kappa Group  vs.  Amcor Plc

 Performance 
       Timeline  
Smurfit Kappa Group 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Smurfit Kappa Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Smurfit Kappa reported solid returns over the last few months and may actually be approaching a breakup point.
Amcor Plc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Amcor Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Amcor Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Smurfit Kappa and Amcor Plc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Smurfit Kappa and Amcor Plc

The main advantage of trading using opposite Smurfit Kappa and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.
The idea behind Smurfit Kappa Group and Amcor Plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 CEOs Directory module to screen CEOs from public companies around the world.

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