Correlation Between Smurfit Kappa and PICC Property

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

Diversification Opportunities for Smurfit Kappa and PICC Property

-0.45

Correlation Coefficient

Smurfit Kappa  PICC Property

Very good diversification

The 3 months correlation between Smurfit and PICC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and PICC Property and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICC Property 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 PICC Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICC Property has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and PICC Property go up and down completely randomly.

Pair Corralation between Smurfit Kappa and PICC Property

Assuming the 90 days horizon Smurfit Kappa Group is expected to under-perform the PICC Property. But the stock apears to be less risky and, when comparing its historical volatility, Smurfit Kappa Group is 1.05 times less risky than PICC Property. The stock trades about -0.14 of its potential returns per unit of risk. The PICC Property and is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  146.00  in PICC Property and on December 29, 2024 and sell it today you would earn a total of  22.00  from holding PICC Property and or generate 15.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Smurfit Kappa Group  vs.  PICC Property and

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. Despite fragile performance in the last few months, the Stock's basic 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.

PICC Property

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PICC Property and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PICC Property reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smurfit Kappa and PICC Property

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

The idea behind Smurfit Kappa Group and PICC Property and 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.