Correlation Between JM Smucker and Simply Good
Can any of the company-specific risk be diversified away by investing in both JM Smucker and Simply Good 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 Simply Good into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and Simply Good Foods, you can compare the effects of market volatilities on JM Smucker and Simply Good 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 Simply Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Simply Good.
Diversification Opportunities for JM Smucker and Simply Good
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SJM and Simply is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Simply Good Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simply Good 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 Simply Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simply Good Foods has no effect on the direction of JM Smucker i.e., JM Smucker and Simply Good go up and down completely randomly.
Pair Corralation between JM Smucker and Simply Good
Considering the 90-day investment horizon JM Smucker is expected to under-perform the Simply Good. But the stock apears to be less risky and, when comparing its historical volatility, JM Smucker is 1.08 times less risky than Simply Good. The stock trades about -0.02 of its potential returns per unit of risk. The Simply Good Foods is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 3,384 in Simply Good Foods on August 28, 2024 and sell it today you would earn a total of 600.00 from holding Simply Good Foods or generate 17.73% 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. Simply Good Foods
Performance |
| Timeline |
| JM Smucker |
| Simply Good Foods |
JM Smucker and Simply Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and Simply Good
The main advantage of trading using opposite JM Smucker and Simply Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker position performs unexpectedly, Simply Good 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 Simply Good will offset losses from the drop in Simply Good'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 |
| Simply Good vs. Post Holdings | Simply Good vs. Treehouse Foods | Simply Good vs. J J Snack | Simply Good vs. Central Garden Pet |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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