Correlation Between J Sainsbury and Pan Pacific
Can any of the company-specific risk be diversified away by investing in both J Sainsbury and Pan Pacific 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 Pan Pacific 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 Pan Pacific International, you can compare the effects of market volatilities on J Sainsbury and Pan Pacific 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 Pan Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Sainsbury and Pan Pacific.
Diversification Opportunities for J Sainsbury and Pan Pacific
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JSNSF and Pan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury plc and Pan Pacific International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Pacific International 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 Pan Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Pacific International has no effect on the direction of J Sainsbury i.e., J Sainsbury and Pan Pacific go up and down completely randomly.
Pair Corralation between J Sainsbury and Pan Pacific
Assuming the 90 days horizon J Sainsbury plc is expected to generate 2.59 times more return on investment than Pan Pacific. However, J Sainsbury is 2.59 times more volatile than Pan Pacific International. It trades about 0.03 of its potential returns per unit of risk. Pan Pacific International is currently generating about -0.01 per unit of risk. If you would invest 353.00 in J Sainsbury plc on August 31, 2024 and sell it today you would earn a total of 2.00 from holding J Sainsbury plc or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Sainsbury plc vs. Pan Pacific International
Performance |
| Timeline |
| J Sainsbury plc |
| Pan Pacific International |
J Sainsbury and Pan Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Sainsbury and Pan Pacific
The main advantage of trading using opposite J Sainsbury and Pan Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Sainsbury position performs unexpectedly, Pan Pacific 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 Pan Pacific will offset losses from the drop in Pan Pacific's long position.| J Sainsbury vs. Kesko Oyj ADR | J Sainsbury vs. Om Holdings International | J Sainsbury vs. Carrefour SA PK | J Sainsbury vs. Carrefour SA |
| Pan Pacific vs. Wal Mart de | Pan Pacific vs. Dollarama | Pan Pacific vs. PriceSmart | Pan Pacific vs. Dollar General |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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