Correlation Between Turning Point and JM Smucker
Can any of the company-specific risk be diversified away by investing in both Turning Point and JM Smucker 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 Turning Point and JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and JM Smucker, you can compare the effects of market volatilities on Turning Point and JM Smucker 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 Turning Point with a short position of JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and JM Smucker.
Diversification Opportunities for Turning Point and JM Smucker
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Turning and SJM is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker and Turning Point 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 Turning Point Brands are associated (or correlated) with JM Smucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JM Smucker has no effect on the direction of Turning Point i.e., Turning Point and JM Smucker go up and down completely randomly.
Pair Corralation between Turning Point and JM Smucker
Considering the 90-day investment horizon Turning Point Brands is expected to generate 1.62 times more return on investment than JM Smucker. However, Turning Point is 1.62 times more volatile than JM Smucker. It trades about 0.65 of its potential returns per unit of risk. JM Smucker is currently generating about -0.02 per unit of risk. If you would invest 4,673 in Turning Point Brands on August 27, 2024 and sell it today you would earn a total of 1,592 from holding Turning Point Brands or generate 34.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. JM Smucker
Performance |
| Timeline |
| Turning Point Brands |
| JM Smucker |
Turning Point and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and JM Smucker
The main advantage of trading using opposite Turning Point and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, JM Smucker 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 JM Smucker will offset losses from the drop in JM Smucker's long position.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| JM Smucker vs. Bellring Brands LLC | JM Smucker vs. Ingredion Incorporated | JM Smucker vs. Nomad Foods | JM Smucker 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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