Correlation Between FUTURE GAMING and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING 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 FUTURE GAMING 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 FUTURE GAMING GRP and JJ SNACK FOODS, you can compare the effects of market volatilities on FUTURE GAMING 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 FUTURE GAMING with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and J+J SNACK.
Diversification Opportunities for FUTURE GAMING and J+J SNACK
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between FUTURE and J+J is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP 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 FUTURE GAMING 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 FUTURE GAMING GRP 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 FUTURE GAMING i.e., FUTURE GAMING and J+J SNACK go up and down completely randomly.
Pair Corralation between FUTURE GAMING and J+J SNACK
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to under-perform the J+J SNACK. In addition to that, FUTURE GAMING is 3.58 times more volatile than JJ SNACK FOODS. It trades about -0.13 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.27 per unit of volatility. If you would invest 15,200 in JJ SNACK FOODS on September 3, 2024 and sell it today you would earn a total of 1,100 from holding JJ SNACK FOODS or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. JJ SNACK FOODS
Performance |
| Timeline |
| FUTURE GAMING GRP |
| JJ SNACK FOODS |
FUTURE GAMING and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and J+J SNACK
The main advantage of trading using opposite FUTURE GAMING and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING 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.| FUTURE GAMING vs. Playtech plc | FUTURE GAMING vs. ARISTOCRAT LEISURE | FUTURE GAMING vs. RYU Apparel | FUTURE GAMING vs. COMMERCIAL VEHICLE |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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