Correlation Between Universal and JM Smucker
Can any of the company-specific risk be diversified away by investing in both Universal 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 Universal and JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal and JM Smucker, you can compare the effects of market volatilities on Universal 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 Universal with a short position of JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal and JM Smucker.
Diversification Opportunities for Universal and JM Smucker
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and SJM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Universal and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker and Universal 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 Universal 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 Universal i.e., Universal and JM Smucker go up and down completely randomly.
Pair Corralation between Universal and JM Smucker
Considering the 90-day investment horizon Universal is expected to generate 1.07 times more return on investment than JM Smucker. However, Universal is 1.07 times more volatile than JM Smucker. It trades about 0.5 of its potential returns per unit of risk. JM Smucker is currently generating about -0.02 per unit of risk. If you would invest 5,005 in Universal on August 27, 2024 and sell it today you would earn a total of 794.00 from holding Universal or generate 15.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal vs. JM Smucker
Performance |
| Timeline |
| Universal |
| JM Smucker |
Universal and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal and JM Smucker
The main advantage of trading using opposite Universal and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal 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.| Universal vs. Imperial Brands PLC | Universal vs. Japan Tobacco ADR | Universal vs. Philip Morris International | Universal vs. Turning Point Brands |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |