Correlation Between VITEC SOFTWARE and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both VITEC SOFTWARE 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 VITEC SOFTWARE 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 VITEC SOFTWARE GROUP and JJ SNACK FOODS, you can compare the effects of market volatilities on VITEC SOFTWARE 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 VITEC SOFTWARE with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITEC SOFTWARE and J+J SNACK.
Diversification Opportunities for VITEC SOFTWARE and J+J SNACK
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VITEC and J+J is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding VITEC SOFTWARE GROUP 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 VITEC SOFTWARE 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 VITEC SOFTWARE GROUP 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 VITEC SOFTWARE i.e., VITEC SOFTWARE and J+J SNACK go up and down completely randomly.
Pair Corralation between VITEC SOFTWARE and J+J SNACK
Assuming the 90 days horizon VITEC SOFTWARE is expected to generate 1.23 times less return on investment than J+J SNACK. In addition to that, VITEC SOFTWARE is 1.51 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 0.27 per unit of volatility. If you would invest 15,200 in JJ SNACK FOODS on September 4, 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
VITEC SOFTWARE GROUP vs. JJ SNACK FOODS
Performance |
| Timeline |
| VITEC SOFTWARE GROUP |
| JJ SNACK FOODS |
VITEC SOFTWARE and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VITEC SOFTWARE and J+J SNACK
The main advantage of trading using opposite VITEC SOFTWARE and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITEC SOFTWARE 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.| VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc |
| J+J SNACK vs. Nestl SA | J+J SNACK vs. Kraft Heinz Co | J+J SNACK vs. General Mills | J+J SNACK vs. Kellogg Company |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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