Correlation Between Rai Way and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both Rai Way 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 Rai Way 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 Rai Way SpA and JJ SNACK FOODS, you can compare the effects of market volatilities on Rai Way 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 Rai Way with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rai Way and J+J SNACK.
Diversification Opportunities for Rai Way and J+J SNACK
Very good diversification
The 3 months correlation between Rai and J+J is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Rai Way SpA 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 Rai Way 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 Rai Way SpA 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 Rai Way i.e., Rai Way and J+J SNACK go up and down completely randomly.
Pair Corralation between Rai Way and J+J SNACK
Assuming the 90 days horizon Rai Way SpA is expected to generate 1.01 times more return on investment than J+J SNACK. However, Rai Way is 1.01 times more volatile than JJ SNACK FOODS. It trades about 0.03 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.02 per unit of risk. If you would invest 460.00 in Rai Way SpA on September 2, 2024 and sell it today you would earn a total of 48.00 from holding Rai Way SpA or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rai Way SpA vs. JJ SNACK FOODS
Performance |
| Timeline |
| Rai Way SpA |
| JJ SNACK FOODS |
Rai Way and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rai Way and J+J SNACK
The main advantage of trading using opposite Rai Way and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rai Way 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.| Rai Way vs. Singapore Airlines Limited | Rai Way vs. NAKED WINES PLC | Rai Way vs. IMAGIN MEDICAL INC | Rai Way vs. International Consolidated Airlines |
| J+J SNACK vs. Danone SA | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. Origin Agritech |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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