Correlation Between Andersons and Jeronimo Martins

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

By analyzing existing cross correlation between The Andersons and Jeronimo Martins SGPS, you can compare the effects of market volatilities on Andersons and Jeronimo Martins 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 Andersons with a short position of Jeronimo Martins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andersons and Jeronimo Martins.

Diversification Opportunities for Andersons and Jeronimo Martins

0.03

Correlation Coefficient

Andersons  Jeronimo Martins

Significant diversification

The 3 months correlation between Andersons and Jeronimo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding The Andersons and Jeronimo Martins SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeronimo Martins SGPS and Andersons 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 The Andersons are associated (or correlated) with Jeronimo Martins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeronimo Martins SGPS has no effect on the direction of Andersons i.e., Andersons and Jeronimo Martins go up and down completely randomly.

Pair Corralation between Andersons and Jeronimo Martins

Given the investment horizon of 90 days The Andersons is expected to under-perform the Jeronimo Martins. In addition to that, Andersons is 1.23 times more volatile than Jeronimo Martins SGPS. It trades about 0.0 of its total potential returns per unit of risk. Jeronimo Martins SGPS is currently generating about 0.04 per unit of volatility. If you would invest  3,740  in Jeronimo Martins SGPS on August 31, 2024 and sell it today you would earn a total of  124.00  from holding Jeronimo Martins SGPS or generate 3.32% return on investment over 90 days.

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

The Andersons  vs.  Jeronimo Martins SGPS

Andersons

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Andersons has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Andersons is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Jeronimo Martins SGPS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jeronimo Martins SGPS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Jeronimo Martins is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Andersons and Jeronimo Martins

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

The idea behind The Andersons and Jeronimo Martins SGPS 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.