Correlation Between Pilgrims Pride and JM Smucker
Can any of the company-specific risk be diversified away by investing in both Pilgrims Pride 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 Pilgrims Pride and JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pilgrims Pride Corp and JM Smucker, you can compare the effects of market volatilities on Pilgrims Pride 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 Pilgrims Pride with a short position of JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pilgrims Pride and JM Smucker.
Diversification Opportunities for Pilgrims Pride and JM Smucker
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pilgrims and SJM is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pilgrims Pride Corp and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker and Pilgrims Pride 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 Pilgrims Pride Corp 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 Pilgrims Pride i.e., Pilgrims Pride and JM Smucker go up and down completely randomly.
Pair Corralation between Pilgrims Pride and JM Smucker
Considering the 90-day investment horizon Pilgrims Pride Corp is expected to generate 1.22 times more return on investment than JM Smucker. However, Pilgrims Pride is 1.22 times more volatile than JM Smucker. It trades about 0.12 of its potential returns per unit of risk. JM Smucker is currently generating about -0.04 per unit of risk. If you would invest 2,825 in Pilgrims Pride Corp on November 9, 2024 and sell it today you would earn a total of 2,040 from holding Pilgrims Pride Corp or generate 72.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pilgrims Pride Corp vs. JM Smucker
Performance |
| Timeline |
| Pilgrims Pride Corp |
| JM Smucker |
Pilgrims Pride and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pilgrims Pride and JM Smucker
The main advantage of trading using opposite Pilgrims Pride and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pilgrims Pride 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.| Pilgrims Pride vs. Bellring Brands LLC | Pilgrims Pride vs. Treehouse Foods | Pilgrims Pride vs. Ingredion Incorporated | Pilgrims Pride vs. JM Smucker |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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