Correlation Between J Sainsbury and Taylor Wimpey

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

Diversification Opportunities for J Sainsbury and Taylor Wimpey

-0.1

Correlation Coefficient

J Sainsbury  Taylor Wimpey

Good diversification

The 3 months correlation between JSNSF and Taylor is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury plc and Taylor Wimpey plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taylor Wimpey plc 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 Taylor Wimpey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taylor Wimpey plc has no effect on the direction of J Sainsbury i.e., J Sainsbury and Taylor Wimpey go up and down completely randomly.

Pair Corralation between J Sainsbury and Taylor Wimpey

Assuming the 90 days horizon J Sainsbury plc is expected to generate 2.08 times more return on investment than Taylor Wimpey. However, J Sainsbury is 2.08 times more volatile than Taylor Wimpey plc. It trades about 0.03 of its potential returns per unit of risk. Taylor Wimpey plc is currently generating about -0.06 per unit of risk. If you would invest  397.00  in J Sainsbury plc on May 14, 2025 and sell it today you would earn a total of  6.00  from holding J Sainsbury plc or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

J Sainsbury plc  vs.  Taylor Wimpey plc

J Sainsbury plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in J Sainsbury plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, J Sainsbury may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Taylor Wimpey plc

Risk-Adjusted Performance

Weakest

Over the last 90 days Taylor Wimpey plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with J Sainsbury and Taylor Wimpey

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

The idea behind J Sainsbury plc and Taylor Wimpey 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.