Correlation Between Green Globe and JM Smucker

Can any of the company-specific risk be diversified away by investing in both Green Globe 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 Green Globe and JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Green Globe International and JM Smucker, you can compare the effects of market volatilities on Green Globe 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 Green Globe with a short position of JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Globe and JM Smucker.

Diversification Opportunities for Green Globe and JM Smucker

0.23

Correlation Coefficient

Green Globe  JM Smucker

Modest diversification

The 3 months correlation between Green and SJM is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Green Globe International and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker and Green Globe 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 Green Globe International 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 Green Globe i.e., Green Globe and JM Smucker go up and down completely randomly.

Pair Corralation between Green Globe and JM Smucker

Given the investment horizon of 90 days Green Globe International is expected to generate 8.66 times more return on investment than JM Smucker. However, Green Globe is 8.66 times more volatile than JM Smucker. It trades about 0.06 of its potential returns per unit of risk. JM Smucker is currently generating about -0.16 per unit of risk. If you would invest  0.08  in Green Globe International on February 2, 2024 and sell it today you would earn a total of  0.00  from holding Green Globe International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Green Globe International  vs.  JM Smucker

Green Globe International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Green Globe International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Green Globe demonstrated solid returns over the last few months and may actually be approaching a breakup point.

JM Smucker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JM Smucker has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Green Globe and JM Smucker

The main advantage of trading using opposite Green Globe and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Globe 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.

The idea behind Green Globe International and JM Smucker 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..