Correlation Between JM Smucker and Freshpet
Can any of the company-specific risk be diversified away by investing in both JM Smucker and Freshpet 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 Freshpet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and Freshpet, you can compare the effects of market volatilities on JM Smucker and Freshpet 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 Freshpet. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Freshpet.
Diversification Opportunities for JM Smucker and Freshpet
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SJM and Freshpet is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Freshpet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshpet 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 Freshpet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshpet has no effect on the direction of JM Smucker i.e., JM Smucker and Freshpet go up and down completely randomly.
Pair Corralation between JM Smucker and Freshpet
Considering the 90-day investment horizon JM Smucker is expected to generate 9.07 times less return on investment than Freshpet. But when comparing it to its historical volatility, JM Smucker is 1.64 times less risky than Freshpet. It trades about 0.03 of its potential returns per unit of risk. Freshpet is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,035 in Freshpet on August 24, 2024 and sell it today you would earn a total of 8,647 from holding Freshpet or generate 122.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JM Smucker vs. Freshpet
Performance |
| Timeline |
| JM Smucker |
| Freshpet |
JM Smucker and Freshpet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and Freshpet
The main advantage of trading using opposite JM Smucker and Freshpet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker position performs unexpectedly, Freshpet 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 Freshpet will offset losses from the drop in Freshpet's long position.| JM Smucker vs. ConAgra Foods | JM Smucker vs. Kellanova | JM Smucker vs. General Mills | JM Smucker vs. Hormel Foods |
| Freshpet vs. Bellring Brands LLC | Freshpet vs. Treehouse Foods | Freshpet vs. Ingredion Incorporated | Freshpet vs. JM Smucker |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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