Correlation Between Trimble and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Trimble and J Sainsbury 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 Trimble and J Sainsbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trimble and J Sainsbury PLC, you can compare the effects of market volatilities on Trimble and J Sainsbury 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 Trimble with a short position of J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimble and J Sainsbury.
Diversification Opportunities for Trimble and J Sainsbury
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trimble and JSAIY is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Trimble and J Sainsbury PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Sainsbury PLC and Trimble 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 Trimble are associated (or correlated) with J Sainsbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Sainsbury PLC has no effect on the direction of Trimble i.e., Trimble and J Sainsbury go up and down completely randomly.
Pair Corralation between Trimble and J Sainsbury
Given the investment horizon of 90 days Trimble is expected to generate 0.67 times more return on investment than J Sainsbury. However, Trimble is 1.5 times less risky than J Sainsbury. It trades about 0.27 of its potential returns per unit of risk. J Sainsbury PLC is currently generating about -0.22 per unit of risk. If you would invest 6,971 in Trimble on November 3, 2024 and sell it today you would earn a total of 525.00 from holding Trimble or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trimble vs. J Sainsbury PLC
Performance |
| Timeline |
| Trimble |
| J Sainsbury PLC |
Trimble and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trimble and J Sainsbury
The main advantage of trading using opposite Trimble and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimble position performs unexpectedly, J Sainsbury 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 J Sainsbury will offset losses from the drop in J Sainsbury's long position.| Trimble vs. Fortive Corp | Trimble vs. MKS Instruments | Trimble vs. Novanta | Trimble vs. Vishay Precision Group |
| J Sainsbury vs. Kesko Oyj ADR | J Sainsbury vs. Om Holdings International | J Sainsbury vs. Tesco PLC | J Sainsbury vs. Carrefour SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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