Correlation Between Bunzl Plc and Jernimo Martins
Can any of the company-specific risk be diversified away by investing in both Bunzl Plc 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 Bunzl Plc and Jernimo Martins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunzl plc and Jernimo Martins SGPS, you can compare the effects of market volatilities on Bunzl Plc 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 Bunzl Plc with a short position of Jernimo Martins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunzl Plc and Jernimo Martins.
Diversification Opportunities for Bunzl Plc and Jernimo Martins
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bunzl and Jernimo is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bunzl plc 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 Bunzl Plc 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 Bunzl plc 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 Bunzl Plc i.e., Bunzl Plc and Jernimo Martins go up and down completely randomly.
Pair Corralation between Bunzl Plc and Jernimo Martins
Assuming the 90 days trading horizon Bunzl plc is expected to under-perform the Jernimo Martins. But the stock apears to be less risky and, when comparing its historical volatility, Bunzl plc is 1.5 times less risky than Jernimo Martins. The stock trades about -0.01 of its potential returns per unit of risk. The Jernimo Martins SGPS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,769 in Jernimo Martins SGPS on November 1, 2024 and sell it today you would earn a total of 152.00 from holding Jernimo Martins SGPS or generate 8.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bunzl plc vs. Jernimo Martins SGPS
Performance |
| Timeline |
| Bunzl plc |
| Jernimo Martins SGPS |
Bunzl Plc and Jernimo Martins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunzl Plc and Jernimo Martins
The main advantage of trading using opposite Bunzl Plc and Jernimo Martins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunzl Plc 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.| Bunzl Plc vs. PSI Software AG | Bunzl Plc vs. SIERRA METALS | Bunzl Plc vs. AEON METALS LTD | Bunzl Plc vs. Aluminum of |
| Jernimo Martins vs. Sysco | Jernimo Martins vs. Bunzl plc | Jernimo Martins vs. Performance Food Group | Jernimo Martins vs. US Foods Holding |
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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