Correlation Between J Sainsbury and Cyrela Brazil

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

Diversification Opportunities for J Sainsbury and Cyrela Brazil

0.13

Correlation Coefficient

J Sainsbury  Cyrela Brazil

Average diversification

The 3 months correlation between JSNSF and Cyrela is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury plc and Cyrela Brazil Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyrela Brazil Realty 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 Cyrela Brazil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyrela Brazil Realty has no effect on the direction of J Sainsbury i.e., J Sainsbury and Cyrela Brazil go up and down completely randomly.

Pair Corralation between J Sainsbury and Cyrela Brazil

Assuming the 90 days horizon J Sainsbury plc is expected to generate 1.85 times more return on investment than Cyrela Brazil. However, J Sainsbury is 1.85 times more volatile than Cyrela Brazil Realty. It trades about 0.08 of its potential returns per unit of risk. Cyrela Brazil Realty is currently generating about -0.02 per unit of risk. If you would invest  342.00  in J Sainsbury plc on April 30, 2025 and sell it today you would earn a total of  65.00  from holding J Sainsbury plc or generate 19.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

J Sainsbury plc  vs.  Cyrela Brazil Realty

J Sainsbury plc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in J Sainsbury plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, J Sainsbury reported solid returns over the last few months and may actually be approaching a breakup point.

Cyrela Brazil Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cyrela Brazil Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Cyrela Brazil is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with J Sainsbury and Cyrela Brazil

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

The idea behind J Sainsbury plc and Cyrela Brazil Realty 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 Transaction History module to view history of all your transactions and understand their impact on performance.