Correlation Between JM Smucker and Natures Sunshine
Can any of the company-specific risk be diversified away by investing in both JM Smucker and Natures Sunshine 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 Natures Sunshine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and Natures Sunshine Products, you can compare the effects of market volatilities on JM Smucker and Natures Sunshine 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 Natures Sunshine. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Natures Sunshine.
Diversification Opportunities for JM Smucker and Natures Sunshine
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SJM and Natures is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Natures Sunshine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Sunshine Products 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 Natures Sunshine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Sunshine Products has no effect on the direction of JM Smucker i.e., JM Smucker and Natures Sunshine go up and down completely randomly.
Pair Corralation between JM Smucker and Natures Sunshine
Considering the 90-day investment horizon JM Smucker is expected to under-perform the Natures Sunshine. But the stock apears to be less risky and, when comparing its historical volatility, JM Smucker is 2.3 times less risky than Natures Sunshine. The stock trades about -0.03 of its potential returns per unit of risk. The Natures Sunshine Products is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 854.00 in Natures Sunshine Products on August 28, 2024 and sell it today you would earn a total of 776.00 from holding Natures Sunshine Products or generate 90.87% 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. Natures Sunshine Products
Performance |
| Timeline |
| JM Smucker |
| Natures Sunshine Products |
JM Smucker and Natures Sunshine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and Natures Sunshine
The main advantage of trading using opposite JM Smucker and Natures Sunshine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker position performs unexpectedly, Natures Sunshine 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 Natures Sunshine will offset losses from the drop in Natures Sunshine's long position.| JM Smucker vs. Bellring Brands LLC | JM Smucker vs. Ingredion Incorporated | JM Smucker vs. Nomad Foods | JM Smucker vs. Simply Good Foods |
| Natures Sunshine vs. Seneca Foods Corp | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Associated British 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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