Correlation Between Carrefour and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Carrefour 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 Carrefour and J Sainsbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrefour SA and J Sainsbury plc, you can compare the effects of market volatilities on Carrefour 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 Carrefour with a short position of J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrefour and J Sainsbury.
Diversification Opportunities for Carrefour and J Sainsbury
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Carrefour and JSNSF is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA 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 Carrefour 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 Carrefour SA 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 Carrefour i.e., Carrefour and J Sainsbury go up and down completely randomly.
Pair Corralation between Carrefour and J Sainsbury
Assuming the 90 days horizon Carrefour SA is expected to generate 0.29 times more return on investment than J Sainsbury. However, Carrefour SA is 3.47 times less risky than J Sainsbury. It trades about -0.02 of its potential returns per unit of risk. J Sainsbury plc is currently generating about -0.13 per unit of risk. If you would invest 1,419 in Carrefour SA on November 3, 2024 and sell it today you would lose (15.00) from holding Carrefour SA or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carrefour SA vs. J Sainsbury plc
Performance |
| Timeline |
| Carrefour SA |
| J Sainsbury plc |
Carrefour and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carrefour and J Sainsbury
The main advantage of trading using opposite Carrefour and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour 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.| Carrefour vs. J Sainsbury plc | Carrefour vs. Om Holdings International | Carrefour vs. Carrefour SA PK | Carrefour vs. Kesko Oyj ADR |
| J Sainsbury vs. Kesko Oyj ADR | J Sainsbury vs. Om Holdings International | J Sainsbury vs. Carrefour SA PK | J Sainsbury vs. Carrefour SA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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