Correlation Between Postal Savings and Jernimo Martins
Can any of the company-specific risk be diversified away by investing in both Postal Savings and Jernimo Martins 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 Postal Savings and Jernimo Martins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and Jernimo Martins SGPS, you can compare the effects of market volatilities on Postal Savings and Jernimo Martins 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 Postal Savings with a short position of Jernimo Martins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Jernimo Martins.
Diversification Opportunities for Postal Savings and Jernimo Martins
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Postal and Jernimo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Jernimo Martins SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jernimo Martins SGPS and Postal Savings 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 Postal Savings Bank are associated (or correlated) with Jernimo Martins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jernimo Martins SGPS has no effect on the direction of Postal Savings i.e., Postal Savings and Jernimo Martins go up and down completely randomly.
Pair Corralation between Postal Savings and Jernimo Martins
Assuming the 90 days horizon Postal Savings Bank is expected to under-perform the Jernimo Martins. But the stock apears to be less risky and, when comparing its historical volatility, Postal Savings Bank is 1.11 times less risky than Jernimo Martins. The stock trades about -0.13 of its potential returns per unit of risk. The Jernimo Martins SGPS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,806 in Jernimo Martins SGPS on September 19, 2024 and sell it today you would earn a total of 38.00 from holding Jernimo Martins SGPS or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. Jernimo Martins SGPS
Performance |
| Timeline |
| Postal Savings Bank |
| Jernimo Martins SGPS |
Postal Savings and Jernimo Martins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Jernimo Martins
The main advantage of trading using opposite Postal Savings and Jernimo Martins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, Jernimo Martins 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 Jernimo Martins will offset losses from the drop in Jernimo Martins' long position.| Postal Savings vs. POSBO UNSPADRS20YC1 | Postal Savings vs. UTD OV BK LOC ADR1 | Postal Savings vs. Superior Plus Corp | Postal Savings vs. SIVERS SEMICONDUCTORS AB |
| Jernimo Martins vs. Verizon Communications | Jernimo Martins vs. Postal Savings Bank | Jernimo Martins vs. HEMISPHERE EGY | Jernimo Martins vs. SEI INVESTMENTS |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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