Correlation Between JM Smucker and United Parcel
Can any of the company-specific risk be diversified away by investing in both JM Smucker and United Parcel 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 JM Smucker and United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and United Parcel Service, you can compare the effects of market volatilities on JM Smucker and United Parcel 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 JM Smucker with a short position of United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and United Parcel.
Diversification Opportunities for JM Smucker and United Parcel
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SJM and United is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service and JM Smucker 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 JM Smucker are associated (or correlated) with United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of JM Smucker i.e., JM Smucker and United Parcel go up and down completely randomly.
Pair Corralation between JM Smucker and United Parcel
Considering the 90-day investment horizon JM Smucker is expected to under-perform the United Parcel. In addition to that, JM Smucker is 1.09 times more volatile than United Parcel Service. It trades about -0.1 of its total potential returns per unit of risk. United Parcel Service is currently generating about 0.07 per unit of volatility. If you would invest 14,379 in United Parcel Service on January 26, 2024 and sell it today you would earn a total of 283.00 from holding United Parcel Service or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JM Smucker vs. United Parcel Service
Performance |
| Timeline |
| JM Smucker |
| United Parcel Service |
JM Smucker and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and United Parcel
The main advantage of trading using opposite JM Smucker and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.| JM Smucker vs. ConAgra Foods | JM Smucker vs. Kellanova | JM Smucker vs. General Mills | JM Smucker vs. Hormel Foods |
| United Parcel vs. GXO Logistics | United Parcel vs. JB Hunt Transport | United Parcel vs. Expeditors International of | United Parcel vs. CH Robinson Worldwide |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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