Correlation Between Ocado Group and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Ocado Group and J Sainsbury 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 Ocado Group and J Sainsbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocado Group plc and J Sainsbury plc, you can compare the effects of market volatilities on Ocado Group and J Sainsbury 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 Ocado Group with a short position of J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocado Group and J Sainsbury.
Diversification Opportunities for Ocado Group and J Sainsbury
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ocado and JSNSF is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ocado Group plc and J Sainsbury plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Sainsbury plc and Ocado Group 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 Ocado Group plc are associated (or correlated) with J Sainsbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Sainsbury plc has no effect on the direction of Ocado Group i.e., Ocado Group and J Sainsbury go up and down completely randomly.
Pair Corralation between Ocado Group and J Sainsbury
Assuming the 90 days horizon Ocado Group plc is expected to under-perform the J Sainsbury. In addition to that, Ocado Group is 1.03 times more volatile than J Sainsbury plc. It trades about -0.02 of its total potential returns per unit of risk. J Sainsbury plc is currently generating about 0.03 per unit of volatility. If you would invest 339.00 in J Sainsbury plc on August 28, 2024 and sell it today you would earn a total of 16.00 from holding J Sainsbury plc or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 50.14% |
| Values | Daily Returns |
Ocado Group plc vs. J Sainsbury plc
Performance |
| Timeline |
| Ocado Group plc |
| J Sainsbury plc |
Ocado Group and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocado Group and J Sainsbury
The main advantage of trading using opposite Ocado Group and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocado Group position performs unexpectedly, J Sainsbury 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 J Sainsbury will offset losses from the drop in J Sainsbury's long position.| Ocado Group vs. Natural Grocers by | Ocado Group vs. Grocery Outlet Holding | Ocado Group vs. Village Super Market | Ocado Group vs. Ingles Markets Incorporated |
| J Sainsbury vs. Kesko Oyj ADR | J Sainsbury vs. Om Holdings International | J Sainsbury vs. Carrefour SA PK | J Sainsbury 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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