Correlation Between Bloomsbury Publishing and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing 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 Bloomsbury Publishing and J Sainsbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and J Sainsbury PLC, you can compare the effects of market volatilities on Bloomsbury Publishing 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 Bloomsbury Publishing with a short position of J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and J Sainsbury.
Diversification Opportunities for Bloomsbury Publishing and J Sainsbury
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bloomsbury and SBRY is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc 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 Bloomsbury Publishing 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 Bloomsbury Publishing Plc 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 Bloomsbury Publishing i.e., Bloomsbury Publishing and J Sainsbury go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and J Sainsbury
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to under-perform the J Sainsbury. But the stock apears to be less risky and, when comparing its historical volatility, Bloomsbury Publishing Plc is 1.05 times less risky than J Sainsbury. The stock trades about -0.17 of its potential returns per unit of risk. The J Sainsbury PLC is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 26,803 in J Sainsbury PLC on August 28, 2024 and sell it today you would lose (1,483) from holding J Sainsbury PLC or give up 5.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. J Sainsbury PLC
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| J Sainsbury PLC |
Bloomsbury Publishing and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and J Sainsbury
The main advantage of trading using opposite Bloomsbury Publishing and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing 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.| Bloomsbury Publishing vs. National Beverage Corp | Bloomsbury Publishing vs. MoneysupermarketCom Group PLC | Bloomsbury Publishing vs. Ebro Foods | Bloomsbury Publishing vs. Universal Music Group |
| J Sainsbury vs. Spirent Communications plc | J Sainsbury vs. Bloomsbury Publishing Plc | J Sainsbury vs. Check Point Software | J Sainsbury vs. British American Tobacco |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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