Correlation Between Superior Plus and Jernimo Martins
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Jernimo Martins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Jernimo Martins SGPS, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Jernimo Martins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Jernimo Martins.
Diversification Opportunities for Superior Plus and Jernimo Martins
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Jernimo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Jernimo Martins go up and down completely randomly.
Pair Corralation between Superior Plus and Jernimo Martins
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Jernimo Martins. In addition to that, Superior Plus is 1.19 times more volatile than Jernimo Martins SGPS. It trades about -0.01 of its total potential returns per unit of risk. Jernimo Martins SGPS is currently generating about 0.0 per unit of volatility. If you would invest 1,941 in Jernimo Martins SGPS on September 12, 2024 and sell it today you would lose (89.00) from holding Jernimo Martins SGPS or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Jernimo Martins SGPS
Performance |
| Timeline |
| Superior Plus Corp |
| Jernimo Martins SGPS |
Superior Plus and Jernimo Martins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Jernimo Martins
The main advantage of trading using opposite Superior Plus and Jernimo Martins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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