Correlation Between JM Smucker and Mead Johnson
Can any of the company-specific risk be diversified away by investing in both JM Smucker and Mead Johnson 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 JM Smucker and Mead Johnson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and Mead Johnson Nutrition, you can compare the effects of market volatilities on JM Smucker and Mead Johnson 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 JM Smucker with a short position of Mead Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Mead Johnson.
Diversification Opportunities for JM Smucker and Mead Johnson
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SJM and Mead is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Mead Johnson Nutrition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mead Johnson Nutrition and JM Smucker 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 JM Smucker are associated (or correlated) with Mead Johnson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mead Johnson Nutrition has no effect on the direction of JM Smucker i.e., JM Smucker and Mead Johnson go up and down completely randomly.
Pair Corralation between JM Smucker and Mead Johnson
If you would invest (100.00) in Mead Johnson Nutrition on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Mead Johnson Nutrition or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
JM Smucker vs. Mead Johnson Nutrition
Performance |
| Timeline |
| JM Smucker |
| Mead Johnson Nutrition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JM Smucker and Mead Johnson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and Mead Johnson
The main advantage of trading using opposite JM Smucker and Mead Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker position performs unexpectedly, Mead Johnson 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 Mead Johnson will offset losses from the drop in Mead Johnson's long position.| JM Smucker vs. ConAgra Foods | JM Smucker vs. Kellanova | JM Smucker vs. General Mills | JM Smucker vs. Hormel Foods |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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