Correlation Between Cass Information and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both Cass Information 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 Cass Information 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 Cass Information Systems and JJ SNACK FOODS, you can compare the effects of market volatilities on Cass Information 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 Cass Information with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and J+J SNACK.
Diversification Opportunities for Cass Information and J+J SNACK
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cass and J+J is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems 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 Cass Information 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 Cass Information Systems 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 Cass Information i.e., Cass Information and J+J SNACK go up and down completely randomly.
Pair Corralation between Cass Information and J+J SNACK
Assuming the 90 days horizon Cass Information Systems is expected to generate 1.34 times more return on investment than J+J SNACK. However, Cass Information is 1.34 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 0.03 per unit of risk. If you would invest 3,753 in Cass Information Systems on August 31, 2024 and sell it today you would earn a total of 467.00 from holding Cass Information Systems or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. JJ SNACK FOODS
Performance |
| Timeline |
| Cass Information Systems |
| JJ SNACK FOODS |
Cass Information and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and J+J SNACK
The main advantage of trading using opposite Cass Information and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information 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.| Cass Information vs. Singapore Telecommunications Limited | Cass Information vs. SBA Communications Corp | Cass Information vs. Tower One Wireless | Cass Information vs. Verizon Communications |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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