Correlation Between Aduro Clean and Smurfit Kappa

Can any of the company-specific risk be diversified away by investing in both Aduro Clean and Smurfit Kappa 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 Aduro Clean and Smurfit Kappa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aduro Clean Technologies and Smurfit Kappa Group, you can compare the effects of market volatilities on Aduro Clean and Smurfit Kappa 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 Aduro Clean with a short position of Smurfit Kappa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aduro Clean and Smurfit Kappa.

Diversification Opportunities for Aduro Clean and Smurfit Kappa

0.0

Correlation Coefficient

Aduro Clean  Smurfit Kappa

Pay attention - limited upside

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

Pair Corralation between Aduro Clean and Smurfit Kappa

If you would invest (100.00) in Smurfit Kappa Group on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Smurfit Kappa Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aduro Clean Technologies  vs.  Smurfit Kappa Group

Aduro Clean Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aduro Clean Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Smurfit Kappa Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smurfit Kappa Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Smurfit Kappa is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aduro Clean and Smurfit Kappa

The main advantage of trading using opposite Aduro Clean and Smurfit Kappa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aduro Clean position performs unexpectedly, Smurfit Kappa 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 Smurfit Kappa will offset losses from the drop in Smurfit Kappa's long position.

The idea behind Aduro Clean Technologies and Smurfit Kappa Group 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.