Correlation Between J Sainsbury and Seven I
Can any of the company-specific risk be diversified away by investing in both J Sainsbury and Seven I 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 Seven I 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 Seven i Holdings, you can compare the effects of market volatilities on J Sainsbury and Seven I 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 Seven I. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Sainsbury and Seven I.
Diversification Opportunities for J Sainsbury and Seven I
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JSNSF and Seven is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury plc and Seven i Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven i Holdings 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 Seven I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven i Holdings has no effect on the direction of J Sainsbury i.e., J Sainsbury and Seven I go up and down completely randomly.
Pair Corralation between J Sainsbury and Seven I
Assuming the 90 days horizon J Sainsbury plc is expected to generate 1.42 times more return on investment than Seven I. However, J Sainsbury is 1.42 times more volatile than Seven i Holdings. It trades about 0.05 of its potential returns per unit of risk. Seven i Holdings is currently generating about 0.03 per unit of risk. If you would invest 249.00 in J Sainsbury plc on September 3, 2024 and sell it today you would earn a total of 106.00 from holding J Sainsbury plc or generate 42.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 64.24% |
| Values | Daily Returns |
J Sainsbury plc vs. Seven i Holdings
Performance |
| Timeline |
| J Sainsbury plc |
| Seven i Holdings |
J Sainsbury and Seven I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Sainsbury and Seven I
The main advantage of trading using opposite J Sainsbury and Seven I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Sainsbury position performs unexpectedly, Seven I 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 Seven I will offset losses from the drop in Seven I'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 |
| Seven I vs. Koninklijke Ahold Delhaize | Seven I vs. Weis Markets | Seven I vs. Albertsons Companies | Seven I vs. Dingdong ADR |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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