Correlation Between Spirent Communications and JERONIMO MARTINS
Can any of the company-specific risk be diversified away by investing in both Spirent Communications and JERONIMO 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 Spirent Communications and JERONIMO MARTINS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and JERONIMO MARTINS UNADR2, you can compare the effects of market volatilities on Spirent Communications and JERONIMO 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 Spirent Communications with a short position of JERONIMO MARTINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and JERONIMO MARTINS.
Diversification Opportunities for Spirent Communications and JERONIMO MARTINS
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spirent and JERONIMO is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc and JERONIMO MARTINS UNADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JERONIMO MARTINS UNADR2 and Spirent Communications 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 Spirent Communications plc are associated (or correlated) with JERONIMO MARTINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JERONIMO MARTINS UNADR2 has no effect on the direction of Spirent Communications i.e., Spirent Communications and JERONIMO MARTINS go up and down completely randomly.
Pair Corralation between Spirent Communications and JERONIMO MARTINS
Assuming the 90 days horizon Spirent Communications plc is expected to generate 2.34 times more return on investment than JERONIMO MARTINS. However, Spirent Communications is 2.34 times more volatile than JERONIMO MARTINS UNADR2. It trades about 0.06 of its potential returns per unit of risk. JERONIMO MARTINS UNADR2 is currently generating about -0.03 per unit of risk. If you would invest 140.00 in Spirent Communications plc on September 25, 2024 and sell it today you would earn a total of 78.00 from holding Spirent Communications plc or generate 55.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. JERONIMO MARTINS UNADR2
Performance |
| Timeline |
| Spirent Communications |
| JERONIMO MARTINS UNADR2 |
Spirent Communications and JERONIMO MARTINS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and JERONIMO MARTINS
The main advantage of trading using opposite Spirent Communications and JERONIMO MARTINS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications position performs unexpectedly, JERONIMO 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 JERONIMO MARTINS will offset losses from the drop in JERONIMO MARTINS's long position.| Spirent Communications vs. T Mobile | Spirent Communications vs. ATT Inc | Spirent Communications vs. ATT Inc | Spirent Communications vs. Deutsche Telekom AG |
| JERONIMO MARTINS vs. Molson Coors Beverage | JERONIMO MARTINS vs. COMBA TELECOM SYST | JERONIMO MARTINS vs. Spirent Communications plc | JERONIMO MARTINS vs. Suntory Beverage Food |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |