Correlation Between MEDICAL FACILITIES and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and J+J SNACK 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 MEDICAL FACILITIES and J+J SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and JJ SNACK FOODS, you can compare the effects of market volatilities on MEDICAL FACILITIES and J+J SNACK 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 MEDICAL FACILITIES with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and J+J SNACK.
Diversification Opportunities for MEDICAL FACILITIES and J+J SNACK
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEDICAL and J+J is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with J+J SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and J+J SNACK go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and J+J SNACK
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to under-perform the J+J SNACK. In addition to that, MEDICAL FACILITIES is 4.03 times more volatile than JJ SNACK FOODS. It trades about -0.06 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.05 per unit of volatility. If you would invest 15,923 in JJ SNACK FOODS on September 24, 2024 and sell it today you would earn a total of 77.00 from holding JJ SNACK FOODS or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. JJ SNACK FOODS
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| JJ SNACK FOODS |
MEDICAL FACILITIES and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and J+J SNACK
The main advantage of trading using opposite MEDICAL FACILITIES and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, J+J SNACK 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 J+J SNACK will offset losses from the drop in J+J SNACK's long position.| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Medicover AB | MEDICAL FACILITIES vs. Charoen Pokphand Foods |
| J+J SNACK vs. Mowi ASA | J+J SNACK vs. LEROY SEAFOOD GRUNSPADR | J+J SNACK vs. Lery Seafood Group | J+J SNACK vs. Nisshin Seifun Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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