Correlation Between H FARM and JJ SNACK
Can any of the company-specific risk be diversified away by investing in both H FARM and JJ 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 H FARM and JJ SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and JJ SNACK FOODS, you can compare the effects of market volatilities on H FARM and JJ 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 H FARM with a short position of JJ SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of H FARM and JJ SNACK.
Diversification Opportunities for H FARM and JJ SNACK
Excellent diversification
The 3 months correlation between 5JQ and JJ1 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding H FARM 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 H FARM 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 H FARM SPA are associated (or correlated) with JJ 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 H FARM i.e., H FARM and JJ SNACK go up and down completely randomly.
Pair Corralation between H FARM and JJ SNACK
Assuming the 90 days horizon H FARM SPA is expected to under-perform the JJ SNACK. In addition to that, H FARM is 3.47 times more volatile than JJ SNACK FOODS. It trades about -0.14 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.14 per unit of volatility. If you would invest 14,922 in JJ SNACK FOODS on August 29, 2024 and sell it today you would earn a total of 1,378 from holding JJ SNACK FOODS or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
H FARM SPA vs. JJ SNACK FOODS
Performance |
| Timeline |
| H FARM SPA |
| JJ SNACK FOODS |
H FARM and JJ SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H FARM and JJ SNACK
The main advantage of trading using opposite H FARM and JJ SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H FARM position performs unexpectedly, JJ 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 JJ SNACK will offset losses from the drop in JJ SNACK's long position.| H FARM vs. Rayonier Advanced Materials | H FARM vs. NEWELL RUBBERMAID | H FARM vs. BE Semiconductor Industries | H FARM vs. ON SEMICONDUCTOR |
| JJ SNACK vs. Iridium Communications | JJ SNACK vs. Hemisphere Energy Corp | JJ SNACK vs. SBA Communications Corp | JJ SNACK vs. Perseus Mining Limited |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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