Correlation Between Aryzta AG and JM Smucker

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

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

Diversification Opportunities for Aryzta AG and JM Smucker

0.14

Correlation Coefficient

Aryzta AG  JM Smucker

Average diversification

The 3 months correlation between Aryzta and SJM is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aryzta AG PK and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker and Aryzta AG 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 Aryzta AG PK 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 Aryzta AG i.e., Aryzta AG and JM Smucker go up and down completely randomly.

Pair Corralation between Aryzta AG and JM Smucker

Assuming the 90 days horizon Aryzta AG PK is expected to generate 1.88 times more return on investment than JM Smucker. However, Aryzta AG is 1.88 times more volatile than JM Smucker. It trades about 0.07 of its potential returns per unit of risk. JM Smucker is currently generating about -0.02 per unit of risk. If you would invest  41.00  in Aryzta AG PK on January 31, 2024 and sell it today you would earn a total of  47.00  from holding Aryzta AG PK or generate 114.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Aryzta AG PK  vs.  JM Smucker

Aryzta AG PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aryzta AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Aryzta AG is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 latest fragile performance, the Stock's forward-looking indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Aryzta AG and JM Smucker

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

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..