Correlation Between Smurfit WestRock and Berry Global

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

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

Diversification Opportunities for Smurfit WestRock and Berry Global

-0.32

Correlation Coefficient

Smurfit WestRock  Berry Global

Very good diversification

The 3 months correlation between Smurfit and Berry is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit WestRock plc and Berry Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berry Global Group and Smurfit WestRock 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 WestRock plc are associated (or correlated) with Berry Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berry Global Group has no effect on the direction of Smurfit WestRock i.e., Smurfit WestRock and Berry Global go up and down completely randomly.

Pair Corralation between Smurfit WestRock and Berry Global

Allowing for the 90-day total investment horizon Smurfit WestRock plc is expected to under-perform the Berry Global. In addition to that, Smurfit WestRock is 1.79 times more volatile than Berry Global Group. It trades about -0.11 of its total potential returns per unit of risk. Berry Global Group is currently generating about 0.1 per unit of volatility. If you would invest  6,474  in Berry Global Group on December 27, 2024 and sell it today you would earn a total of  525.00  from holding Berry Global Group or generate 8.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Smurfit WestRock plc  vs.  Berry Global Group

Smurfit WestRock plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smurfit WestRock plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Berry Global Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Berry Global Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Berry Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Smurfit WestRock and Berry Global

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

The idea behind Smurfit WestRock plc and Berry Global 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.