Correlation Between JM Smucker and Becton Dickinson

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Can any of the company-specific risk be diversified away by investing in both JM Smucker and Becton Dickinson 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 Becton Dickinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and Becton Dickinson And, you can compare the effects of market volatilities on JM Smucker and Becton Dickinson 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 Becton Dickinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Becton Dickinson.

Diversification Opportunities for JM Smucker and Becton Dickinson

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between JM Smucker and Becton is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Becton Dickinson And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becton Dickinson And 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 Becton Dickinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becton Dickinson And has no effect on the direction of JM Smucker i.e., JM Smucker and Becton Dickinson go up and down completely randomly.

Pair Corralation between JM Smucker and Becton Dickinson

Considering the 90-day investment horizon JM Smucker is expected to generate 1.37 times less return on investment than Becton Dickinson. But when comparing it to its historical volatility, JM Smucker is 1.89 times less risky than Becton Dickinson. It trades about 0.11 of its potential returns per unit of risk. Becton Dickinson And is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  23,117  in Becton Dickinson And on August 28, 2022 and sell it today you would earn a total of  689.00  from holding Becton Dickinson And or generate 2.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

JM Smucker  vs.  Becton Dickinson And

 Performance (%) 
       Timeline  
JM Smucker 
JM Smucker Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JM Smucker are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward-looking indicators, JM Smucker may actually be approaching a critical reversion point that can send shares even higher in December 2022.

JM Smucker Price Channel

Becton Dickinson And 
Becton Performance
0 of 100
Over the last 90 days Becton Dickinson And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Becton Dickinson is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Becton Price Channel

JM Smucker and Becton Dickinson Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JM Smucker and Becton Dickinson

The main advantage of trading using opposite JM Smucker and Becton Dickinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker position performs unexpectedly, Becton Dickinson 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 Becton Dickinson will offset losses from the drop in Becton Dickinson's long position.
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The idea behind JM Smucker and Becton Dickinson And 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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