Correlation Between JM Smucker and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both JM Smucker and ConAgra Foods 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 JM Smucker and ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and ConAgra Foods, you can compare the effects of market volatilities on JM Smucker and ConAgra Foods 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 JM Smucker with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and ConAgra Foods.
Diversification Opportunities for JM Smucker and ConAgra Foods
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SJM and ConAgra is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and JM Smucker 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 JM Smucker are associated (or correlated) with ConAgra Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConAgra Foods has no effect on the direction of JM Smucker i.e., JM Smucker and ConAgra Foods go up and down completely randomly.
Pair Corralation between JM Smucker and ConAgra Foods
Considering the 90-day investment horizon JM Smucker is expected to generate 1.17 times more return on investment than ConAgra Foods. However, JM Smucker is 1.17 times more volatile than ConAgra Foods. It trades about -0.02 of its potential returns per unit of risk. ConAgra Foods is currently generating about -0.28 per unit of risk. If you would invest 11,433 in JM Smucker on August 28, 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 |
JM Smucker vs. ConAgra Foods
Performance |
| Timeline |
| JM Smucker |
| ConAgra Foods |
JM Smucker and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and ConAgra Foods
The main advantage of trading using opposite JM Smucker and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker position performs unexpectedly, ConAgra Foods 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 ConAgra Foods will offset losses from the drop in ConAgra Foods' long position.| JM Smucker vs. Bellring Brands LLC | JM Smucker vs. Ingredion Incorporated | JM Smucker vs. Nomad Foods | JM Smucker vs. Simply Good Foods |
| ConAgra Foods vs. Bellring Brands LLC | ConAgra Foods vs. Ingredion Incorporated | ConAgra Foods vs. Nomad Foods | ConAgra Foods 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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