Correlation Between Smurfit Kappa and Apple

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Smurfit Kappa and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and Apple.

Diversification Opportunities for Smurfit Kappa and Apple

-0.77
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Smurfit and Apple is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and Apple go up and down completely randomly.

Pair Corralation between Smurfit Kappa and Apple

Assuming the 90 days trading horizon Smurfit Kappa Group is expected to generate 1.18 times more return on investment than Apple. However, Smurfit Kappa is 1.18 times more volatile than Apple Inc. It trades about 0.26 of its potential returns per unit of risk. Apple Inc is currently generating about -0.18 per unit of risk. If you would invest  3,581  in Smurfit Kappa Group on December 29, 2023 and sell it today you would earn a total of  631.00  from holding Smurfit Kappa Group or generate 17.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy97.67%
ValuesDaily Returns

Smurfit Kappa Group  vs.  Apple Inc

 Performance 
       Timeline  
Smurfit Kappa Group 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Smurfit Kappa Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Smurfit Kappa reported solid returns over the last few months and may actually be approaching a breakup point.
Apple Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Smurfit Kappa and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Smurfit Kappa and Apple

The main advantage of trading using opposite Smurfit Kappa and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
The idea behind Smurfit Kappa Group and Apple Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Content Syndication
Quickly integrate customizable finance content to your own investment portal