Correlation Between J Sainsbury and Alimentation Couche

Can any of the company-specific risk be diversified away by investing in both J Sainsbury and Alimentation Couche 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 Alimentation Couche 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 Alimentation Couche Tard, you can compare the effects of market volatilities on J Sainsbury and Alimentation Couche 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 Alimentation Couche. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Sainsbury and Alimentation Couche.

Diversification Opportunities for J Sainsbury and Alimentation Couche

0.0

Correlation Coefficient

J Sainsbury  Alimentation Couche

Pay attention - limited upside

The 3 months correlation between JSNSF and Alimentation is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury plc and Alimentation Couche Tard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimentation Couche Tard 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 Alimentation Couche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimentation Couche Tard has no effect on the direction of J Sainsbury i.e., J Sainsbury and Alimentation Couche go up and down completely randomly.

Pair Corralation between J Sainsbury and Alimentation Couche

If you would invest (100.00) in Alimentation Couche Tard on January 26, 2024 and sell it today you would earn a total of  100.00  from holding Alimentation Couche Tard or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

J Sainsbury plc  vs.  Alimentation Couche Tard

J Sainsbury plc

Risk-Adjusted Performance

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Very Weak

Over the last 90 days J Sainsbury plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Alimentation Couche Tard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alimentation Couche Tard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Alimentation Couche is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with J Sainsbury and Alimentation Couche

The main advantage of trading using opposite J Sainsbury and Alimentation Couche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Sainsbury position performs unexpectedly, Alimentation Couche 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 Alimentation Couche will offset losses from the drop in Alimentation Couche's long position.

The idea behind J Sainsbury plc and Alimentation Couche Tard pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.