Correlation Between Consorcio ARA and J Sainsbury

Can any of the company-specific risk be diversified away by investing in both Consorcio ARA and J Sainsbury 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 Consorcio ARA and J Sainsbury into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Consorcio ARA S and J Sainsbury plc, you can compare the effects of market volatilities on Consorcio ARA and J Sainsbury 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 Consorcio ARA with a short position of J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consorcio ARA and J Sainsbury.

Diversification Opportunities for Consorcio ARA and J Sainsbury

0.21

Correlation Coefficient

Consorcio ARA  J Sainsbury

Modest diversification

The 3 months correlation between Consorcio and JSNSF is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Consorcio ARA S and J Sainsbury plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Sainsbury plc and Consorcio ARA 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 Consorcio ARA S are associated (or correlated) with J Sainsbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Sainsbury plc has no effect on the direction of Consorcio ARA i.e., Consorcio ARA and J Sainsbury go up and down completely randomly.

Pair Corralation between Consorcio ARA and J Sainsbury

Assuming the 90 days horizon Consorcio ARA S is expected to under-perform the J Sainsbury. In addition to that, Consorcio ARA is 37.18 times more volatile than J Sainsbury plc. It trades about -0.2 of its total potential returns per unit of risk. J Sainsbury plc is currently generating about 0.01 per unit of volatility. If you would invest  416.00  in J Sainsbury plc on May 22, 2025 and sell it today you would lose (19.00) from holding J Sainsbury plc or give up 4.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Consorcio ARA S  vs.  J Sainsbury plc

Consorcio ARA S

Risk-Adjusted Performance

Weakest

Over the last 90 days Consorcio ARA S has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

J Sainsbury plc

Risk-Adjusted Performance

Soft

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

Pair Trading with Consorcio ARA and J Sainsbury

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

The idea behind Consorcio ARA S and J Sainsbury plc 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.