Correlation Between BJs Wholesale and JM Smucker
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and JM Smucker 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 BJs Wholesale and JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Wholesale Club and JM Smucker, you can compare the effects of market volatilities on BJs Wholesale and JM Smucker 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 BJs Wholesale with a short position of JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and JM Smucker.
Diversification Opportunities for BJs Wholesale and JM Smucker
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and SJM is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker and BJs Wholesale 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 BJs Wholesale Club are associated (or correlated) with JM Smucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JM Smucker has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and JM Smucker go up and down completely randomly.
Pair Corralation between BJs Wholesale and JM Smucker
Allowing for the 90-day total investment horizon BJs Wholesale Club is expected to generate 1.47 times more return on investment than JM Smucker. However, BJs Wholesale is 1.47 times more volatile than JM Smucker. It trades about 0.19 of its potential returns per unit of risk. JM Smucker is currently generating about -0.08 per unit of risk. If you would invest 8,558 in BJs Wholesale Club on August 24, 2024 and sell it today you would earn a total of 721.00 from holding BJs Wholesale Club or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. JM Smucker
Performance |
| Timeline |
| BJs Wholesale Club |
| JM Smucker |
BJs Wholesale and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and JM Smucker
The main advantage of trading using opposite BJs Wholesale and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, JM Smucker 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 JM Smucker will offset losses from the drop in JM Smucker's long position.| BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
| JM Smucker vs. ConAgra Foods | JM Smucker vs. Kellanova | JM Smucker vs. General Mills | JM Smucker vs. Hormel Foods |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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