Correlation Between Smurfit Kappa and Ball

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

Diversification Opportunities for Smurfit Kappa and Ball

0.28

Correlation Coefficient

Smurfit Kappa  Ball

Modest diversification

The 3 months correlation between Smurfit and Ball is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball 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 Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and Ball go up and down completely randomly.

Pair Corralation between Smurfit Kappa and Ball

Assuming the 90 days horizon Smurfit Kappa Group is expected to under-perform the Ball. In addition to that, Smurfit Kappa is 1.43 times more volatile than Ball Corporation. It trades about -0.11 of its total potential returns per unit of risk. Ball Corporation is currently generating about -0.05 per unit of volatility. If you would invest  5,478  in Ball Corporation on December 28, 2024 and sell it today you would lose (329.00) from holding Ball Corporation or give up 6.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Smurfit Kappa Group  vs.  Ball Corp.

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 weak 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.

Ball

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ball Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Ball is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Smurfit Kappa and Ball

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

The idea behind Smurfit Kappa Group and Ball Corporation 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.