Correlation Between Healthier Choices and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Healthier Choices 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 Healthier Choices and J Sainsbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthier Choices Management and J Sainsbury plc, you can compare the effects of market volatilities on Healthier Choices 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 Healthier Choices with a short position of J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthier Choices and J Sainsbury.
Diversification Opportunities for Healthier Choices and J Sainsbury
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Healthier and JSNSF is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Healthier Choices Management 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 Healthier Choices 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 Healthier Choices Management 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 Healthier Choices i.e., Healthier Choices and J Sainsbury go up and down completely randomly.
Pair Corralation between Healthier Choices and J Sainsbury
Given the investment horizon of 90 days Healthier Choices Management is expected to generate 91.88 times more return on investment than J Sainsbury. However, Healthier Choices is 91.88 times more volatile than J Sainsbury plc. It trades about 0.4 of its potential returns per unit of risk. J Sainsbury plc is currently generating about 0.03 per unit of risk. If you would invest 0.00 in Healthier Choices Management on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Healthier Choices Management or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Healthier Choices Management vs. J Sainsbury plc
Performance |
| Timeline |
| Healthier Choices |
| J Sainsbury plc |
Healthier Choices and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthier Choices and J Sainsbury
The main advantage of trading using opposite Healthier Choices and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthier Choices 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.| Healthier Choices vs. Albertsons Companies | Healthier Choices vs. Sprouts Farmers Market | Healthier Choices vs. Krispy Kreme | Healthier Choices vs. Grocery Outlet Holding |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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