Correlation Between John B and JM Smucker
Can any of the company-specific risk be diversified away by investing in both John B and JM Smucker 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 JM Smucker 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 JM Smucker, you can compare the effects of market volatilities on John B and JM Smucker 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 JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and JM Smucker.
Diversification Opportunities for John B and JM Smucker
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between John and SJM is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker 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 JM Smucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JM Smucker has no effect on the direction of John B i.e., John B and JM Smucker go up and down completely randomly.
Pair Corralation between John B and JM Smucker
Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the JM Smucker. In addition to that, John B is 1.2 times more volatile than JM Smucker. It trades about -0.07 of its total potential returns per unit of risk. JM Smucker is currently generating about -0.04 per unit of volatility. If you would invest 12,354 in JM Smucker on November 9, 2024 and sell it today you would lose (2,034) from holding JM Smucker or give up 16.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John B Sanfilippo vs. JM Smucker
Performance |
| Timeline |
| John B Sanfilippo |
| JM Smucker |
John B and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and JM Smucker
The main advantage of trading using opposite John B and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B position performs unexpectedly, JM Smucker 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 JM Smucker will offset losses from the drop in JM Smucker's long position.| John B vs. Lancaster Colony | John B vs. Treehouse Foods | John B vs. Seneca Foods Corp | John B vs. J J Snack |
| JM Smucker vs. ConAgra Foods | JM Smucker vs. Kellanova | JM Smucker vs. General Mills | JM Smucker vs. Hormel Foods |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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