Correlation Between J Sainsbury and Wm Morrison
Can any of the company-specific risk be diversified away by investing in both J Sainsbury and Wm Morrison 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 Wm Morrison 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 Wm Morrison Supermarkets, you can compare the effects of market volatilities on J Sainsbury and Wm Morrison 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 Wm Morrison. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Sainsbury and Wm Morrison.
Diversification Opportunities for J Sainsbury and Wm Morrison
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JSNSF and MRWSF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury plc and Wm Morrison Supermarkets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wm Morrison Supermarkets 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 Wm Morrison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wm Morrison Supermarkets has no effect on the direction of J Sainsbury i.e., J Sainsbury and Wm Morrison go up and down completely randomly.
Pair Corralation between J Sainsbury and Wm Morrison
If you would invest 313.00 in J Sainsbury plc on January 25, 2024 and sell it today you would lose (3.00) from holding J Sainsbury plc or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
J Sainsbury plc vs. Wm Morrison Supermarkets
Performance |
| Timeline |
| J Sainsbury plc |
| Wm Morrison Supermarkets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
J Sainsbury and Wm Morrison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Sainsbury and Wm Morrison
The main advantage of trading using opposite J Sainsbury and Wm Morrison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Sainsbury position performs unexpectedly, Wm Morrison 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 Wm Morrison will offset losses from the drop in Wm Morrison's long position.| J Sainsbury vs. Natural Grocers by | J Sainsbury vs. Grocery Outlet Holding | J Sainsbury vs. Village Super Market | J Sainsbury vs. Ingles Markets Incorporated |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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