Correlation Between WH Group and JM Smucker
Can any of the company-specific risk be diversified away by investing in both WH Group 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 WH Group and JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WH Group Ltd and JM Smucker, you can compare the effects of market volatilities on WH Group 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 WH Group with a short position of JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of WH Group and JM Smucker.
Diversification Opportunities for WH Group and JM Smucker
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WHGLY and SJM is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding WH Group Ltd and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker and WH Group 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 WH Group Ltd 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 WH Group i.e., WH Group and JM Smucker go up and down completely randomly.
Pair Corralation between WH Group and JM Smucker
Assuming the 90 days horizon WH Group Ltd is expected to generate 1.42 times more return on investment than JM Smucker. However, WH Group is 1.42 times more volatile than JM Smucker. It trades about 0.27 of its potential returns per unit of risk. JM Smucker is currently generating about -0.11 per unit of risk. If you would invest 1,309 in WH Group Ltd on January 25, 2024 and sell it today you would earn a total of 179.00 from holding WH Group Ltd or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
WH Group Ltd vs. JM Smucker
Performance |
| Timeline |
| WH Group |
| JM Smucker |
WH Group and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WH Group and JM Smucker
The main advantage of trading using opposite WH Group and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WH Group 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.| WH Group vs. Kellanova | WH Group vs. Lancaster Colony | WH Group vs. The A2 Milk | WH Group vs. Artisan Consumer Goods |
| JM Smucker vs. ConAgra Foods | JM Smucker vs. Kellanova | JM Smucker vs. General Mills | JM Smucker vs. Hormel 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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