Correlation Between J Sainsbury and CP All
Can any of the company-specific risk be diversified away by investing in both J Sainsbury and CP All 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 J Sainsbury and CP All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Sainsbury PLC and CP All PCL, you can compare the effects of market volatilities on J Sainsbury and CP All 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 J Sainsbury with a short position of CP All. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Sainsbury and CP All.
Diversification Opportunities for J Sainsbury and CP All
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between JSAIY and CPPCY is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury PLC and CP All PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP All PCL and J Sainsbury 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 J Sainsbury PLC are associated (or correlated) with CP All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP All PCL has no effect on the direction of J Sainsbury i.e., J Sainsbury and CP All go up and down completely randomly.
Pair Corralation between J Sainsbury and CP All
Assuming the 90 days horizon J Sainsbury PLC is expected to under-perform the CP All. But the otc stock apears to be less risky and, when comparing its historical volatility, J Sainsbury PLC is 2.19 times less risky than CP All. The otc stock trades about 0.0 of its potential returns per unit of risk. The CP All PCL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,503 in CP All PCL on September 3, 2024 and sell it today you would earn a total of 449.00 from holding CP All PCL or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.23% |
| Values | Daily Returns |
J Sainsbury PLC vs. CP All PCL
Performance |
| Timeline |
| J Sainsbury PLC |
| CP All PCL |
J Sainsbury and CP All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Sainsbury and CP All
The main advantage of trading using opposite J Sainsbury and CP All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Sainsbury position performs unexpectedly, CP All 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 CP All will offset losses from the drop in CP All's long position.| J Sainsbury vs. Kesko Oyj ADR | J Sainsbury vs. Om Holdings International | J Sainsbury vs. Tesco PLC | J Sainsbury vs. Carrefour SA |
| CP All vs. Kesko Oyj ADR | CP All vs. Om Holdings International | CP All vs. Tesco PLC | CP All 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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