Correlation Between Real Good and JM Smucker
Can any of the company-specific risk be diversified away by investing in both Real Good 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 Real Good and JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Good Food and JM Smucker, you can compare the effects of market volatilities on Real Good 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 Real Good with a short position of JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Good and JM Smucker.
Diversification Opportunities for Real Good and JM Smucker
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Real and SJM is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Real Good Food and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker and Real Good 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 Real Good Food 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 Real Good i.e., Real Good and JM Smucker go up and down completely randomly.
Pair Corralation between Real Good and JM Smucker
Considering the 90-day investment horizon Real Good Food is expected to under-perform the JM Smucker. In addition to that, Real Good is 2.94 times more volatile than JM Smucker. It trades about -0.31 of its total potential returns per unit of risk. JM Smucker is currently generating about -0.02 per unit of volatility. If you would invest 11,433 in JM Smucker on August 27, 2024 and sell it today you would lose (71.00) from holding JM Smucker or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Good Food vs. JM Smucker
Performance |
| Timeline |
| Real Good Food |
| JM Smucker |
Real Good and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Good and JM Smucker
The main advantage of trading using opposite Real Good and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Good 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.| Real Good vs. Bellring Brands LLC | Real Good vs. Ingredion Incorporated | Real Good vs. Nomad Foods | Real Good vs. Simply Good Foods |
| JM Smucker vs. Bellring Brands LLC | JM Smucker vs. Ingredion Incorporated | JM Smucker vs. Nomad Foods | JM Smucker vs. Simply Good 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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