Correlation Between JM Smucker and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both JM Smucker and Lifeway 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 Lifeway 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 Lifeway Foods, you can compare the effects of market volatilities on JM Smucker and Lifeway 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 Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Lifeway Foods.
Diversification Opportunities for JM Smucker and Lifeway Foods
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between SJM and Lifeway is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway 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 Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of JM Smucker i.e., JM Smucker and Lifeway Foods go up and down completely randomly.
Pair Corralation between JM Smucker and Lifeway Foods
Considering the 90-day investment horizon JM Smucker is expected to generate 0.38 times more return on investment than Lifeway Foods. However, JM Smucker is 2.61 times less risky than Lifeway Foods. It trades about -0.02 of its potential returns per unit of risk. Lifeway Foods is currently generating about -0.1 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JM Smucker vs. Lifeway Foods
Performance |
| Timeline |
| JM Smucker |
| Lifeway Foods |
JM Smucker and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and Lifeway Foods
The main advantage of trading using opposite JM Smucker and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker position performs unexpectedly, Lifeway 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 Lifeway Foods will offset losses from the drop in Lifeway 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 |
| Lifeway Foods vs. Bellring Brands LLC | Lifeway Foods vs. Ingredion Incorporated | Lifeway Foods vs. Nomad Foods | Lifeway 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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