Correlation Between Above Food and J J
Can any of the company-specific risk be diversified away by investing in both Above Food and J J 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 Above Food and J J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Above Food Ingredients and J J Snack, you can compare the effects of market volatilities on Above Food and J J 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 Above Food with a short position of J J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Above Food and J J.
Diversification Opportunities for Above Food and J J
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Above and JJSF is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Above Food Ingredients and J J Snack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J J Snack and Above Food 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 Above Food Ingredients are associated (or correlated) with J J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J J Snack has no effect on the direction of Above Food i.e., Above Food and J J go up and down completely randomly.
Pair Corralation between Above Food and J J
Given the investment horizon of 90 days Above Food Ingredients is expected to under-perform the J J. In addition to that, Above Food is 4.97 times more volatile than J J Snack. It trades about -0.09 of its total potential returns per unit of risk. J J Snack is currently generating about 0.02 per unit of volatility. If you would invest 15,803 in J J Snack on September 12, 2024 and sell it today you would earn a total of 1,204 from holding J J Snack or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.48% |
| Values | Daily Returns |
Above Food Ingredients vs. J J Snack
Performance |
| Timeline |
| Above Food Ingredients |
| J J Snack |
Above Food and J J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Above Food and J J
The main advantage of trading using opposite Above Food and J J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Above Food position performs unexpectedly, J J 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 will offset losses from the drop in J J's long position.| Above Food vs. J J Snack | Above Food vs. Central Garden Pet | Above Food vs. Central Garden Pet | Above Food vs. Lancaster Colony |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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