Correlation Between Rumble and SJM Holdings

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

By analyzing existing cross correlation between Rumble Inc and SJM Holdings Ltd, you can compare the effects of market volatilities on Rumble and SJM Holdings 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 Rumble with a short position of SJM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rumble and SJM Holdings.

Diversification Opportunities for Rumble and SJM Holdings

0.39

Correlation Coefficient

Rumble  SJM Holdings

Weak diversification

The 3 months correlation between Rumble and SJM is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Rumble Inc and SJM Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SJM Holdings and Rumble 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 Rumble Inc are associated (or correlated) with SJM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SJM Holdings has no effect on the direction of Rumble i.e., Rumble and SJM Holdings go up and down completely randomly.

Pair Corralation between Rumble and SJM Holdings

If you would invest  111.00  in SJM Holdings Ltd on December 4, 2024 and sell it today you would earn a total of  0.00  from holding SJM Holdings Ltd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Rumble Inc  vs.  SJM Holdings Ltd

Rumble Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rumble Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Rumble displayed solid returns over the last few months and may actually be approaching a breakup point.

SJM Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SJM Holdings Ltd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, SJM Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rumble and SJM Holdings

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

The idea behind Rumble Inc and SJM Holdings Ltd 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.