Correlation Between J Sainsbury and Caseys General
Can any of the company-specific risk be diversified away by investing in both J Sainsbury and Caseys General 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 J Sainsbury and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Sainsbury PLC and Caseys General Stores, you can compare the effects of market volatilities on J Sainsbury and Caseys General 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 J Sainsbury with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Sainsbury and Caseys General.
Diversification Opportunities for J Sainsbury and Caseys General
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JSAIY and Caseys is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury PLC and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores and J Sainsbury 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 J Sainsbury PLC are associated (or correlated) with Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of J Sainsbury i.e., J Sainsbury and Caseys General go up and down completely randomly.
Pair Corralation between J Sainsbury and Caseys General
Assuming the 90 days horizon J Sainsbury is expected to generate 1.19 times less return on investment than Caseys General. But when comparing it to its historical volatility, J Sainsbury PLC is 1.19 times less risky than Caseys General. It trades about 0.08 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 29,904 in Caseys General Stores on January 25, 2024 and sell it today you would earn a total of 1,428 from holding Caseys General Stores or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Sainsbury PLC vs. Caseys General Stores
Performance |
| Timeline |
| J Sainsbury PLC |
| Caseys General Stores |
J Sainsbury and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Sainsbury and Caseys General
The main advantage of trading using opposite J Sainsbury and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Sainsbury position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.| J Sainsbury vs. Casino Guichard Perrachon Socit | J Sainsbury vs. Ocado Group PLC | J Sainsbury vs. Village Super Market | J Sainsbury vs. Albertsons Companies |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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