Correlation Between CNH Industrial and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both CNH Industrial 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 CNH Industrial 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 CNH Industrial NV and JJ SNACK FOODS, you can compare the effects of market volatilities on CNH Industrial 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 CNH Industrial with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and J+J SNACK.
Diversification Opportunities for CNH Industrial and J+J SNACK
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNH and J+J is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV 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 CNH Industrial 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 CNH Industrial NV 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 CNH Industrial i.e., CNH Industrial and J+J SNACK go up and down completely randomly.
Pair Corralation between CNH Industrial and J+J SNACK
Assuming the 90 days trading horizon CNH Industrial NV is expected to generate 2.65 times more return on investment than J+J SNACK. However, CNH Industrial is 2.65 times more volatile than JJ SNACK FOODS. It trades about 0.22 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.27 per unit of risk. If you would invest 1,033 in CNH Industrial NV on September 3, 2024 and sell it today you would earn a total of 158.00 from holding CNH Industrial NV or generate 15.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. JJ SNACK FOODS
Performance |
| Timeline |
| CNH Industrial NV |
| JJ SNACK FOODS |
CNH Industrial and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and J+J SNACK
The main advantage of trading using opposite CNH Industrial and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial 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.| CNH Industrial vs. MAGNUM MINING EXP | CNH Industrial vs. Calibre Mining Corp | CNH Industrial vs. PARKEN Sport Entertainment | CNH Industrial vs. GALENA MINING LTD |
| J+J SNACK vs. GOLD ROAD RES | J+J SNACK vs. CosmoSteel Holdings Limited | J+J SNACK vs. Caltagirone SpA | J+J SNACK vs. TEXAS ROADHOUSE |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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