Correlation Between Panasonic Corp and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Panasonic Corp and J Sainsbury 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 Panasonic Corp and J Sainsbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic Corp and J Sainsbury PLC, you can compare the effects of market volatilities on Panasonic Corp and J Sainsbury 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 Panasonic Corp with a short position of J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic Corp and J Sainsbury.
Diversification Opportunities for Panasonic Corp and J Sainsbury
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Panasonic and SBRY is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and J Sainsbury PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Sainsbury PLC and Panasonic Corp 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 Panasonic Corp are associated (or correlated) with J Sainsbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Sainsbury PLC has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and J Sainsbury go up and down completely randomly.
Pair Corralation between Panasonic Corp and J Sainsbury
Assuming the 90 days trading horizon Panasonic Corp is expected to generate 1.97 times more return on investment than J Sainsbury. However, Panasonic Corp is 1.97 times more volatile than J Sainsbury PLC. It trades about 0.62 of its potential returns per unit of risk. J Sainsbury PLC is currently generating about -0.16 per unit of risk. If you would invest 124,450 in Panasonic Corp on August 28, 2024 and sell it today you would earn a total of 29,150 from holding Panasonic Corp or generate 23.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
Panasonic Corp vs. J Sainsbury PLC
Performance |
| Timeline |
| Panasonic Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| J Sainsbury PLC |
Panasonic Corp and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panasonic Corp and J Sainsbury
The main advantage of trading using opposite Panasonic Corp and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic Corp position performs unexpectedly, J Sainsbury 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 J Sainsbury will offset losses from the drop in J Sainsbury's long position.| Panasonic Corp vs. Catalyst Media Group | Panasonic Corp vs. CATLIN GROUP | Panasonic Corp vs. Tamburi Investment Partners | Panasonic Corp vs. Magnora ASA |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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