Correlation Between John B and McCormick Company
Can any of the company-specific risk be diversified away by investing in both John B and McCormick Company 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 John B and McCormick Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John B Sanfilippo and McCormick Company Incorporated, you can compare the effects of market volatilities on John B and McCormick Company 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 John B with a short position of McCormick Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and McCormick Company.
Diversification Opportunities for John B and McCormick Company
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and McCormick is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and McCormick Company Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McCormick Company and John B 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 John B Sanfilippo are associated (or correlated) with McCormick Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McCormick Company has no effect on the direction of John B i.e., John B and McCormick Company go up and down completely randomly.
Pair Corralation between John B and McCormick Company
Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the McCormick Company. In addition to that, John B is 2.24 times more volatile than McCormick Company Incorporated. It trades about -0.17 of its total potential returns per unit of risk. McCormick Company Incorporated is currently generating about -0.08 per unit of volatility. If you would invest 7,909 in McCormick Company Incorporated on August 27, 2024 and sell it today you would lose (175.00) from holding McCormick Company Incorporated or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John B Sanfilippo vs. McCormick Company Incorporated
Performance |
| Timeline |
| John B Sanfilippo |
| McCormick Company |
John B and McCormick Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and McCormick Company
The main advantage of trading using opposite John B and McCormick Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B position performs unexpectedly, McCormick Company 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 McCormick Company will offset losses from the drop in McCormick Company's long position.| John B vs. Bellring Brands LLC | John B vs. Ingredion Incorporated | John B vs. Nomad Foods | John B vs. Post Holdings |
| McCormick Company vs. Central Garden Pet | McCormick Company vs. Natures Sunshine Products | McCormick Company vs. Seneca Foods Corp | McCormick Company vs. Central Garden Pet |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |