Correlation Between China Resources and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both China Resources 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 China Resources 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 China Resources Beer and JJ SNACK FOODS, you can compare the effects of market volatilities on China Resources 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 China Resources with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and J+J SNACK.
Diversification Opportunities for China Resources and J+J SNACK
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and J+J is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer 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 China Resources 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 China Resources Beer 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 China Resources i.e., China Resources and J+J SNACK go up and down completely randomly.
Pair Corralation between China Resources and J+J SNACK
Assuming the 90 days horizon China Resources Beer is expected to under-perform the J+J SNACK. In addition to that, China Resources is 2.5 times more volatile than JJ SNACK FOODS. It trades about -0.01 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.03 per unit of volatility. If you would invest 13,837 in JJ SNACK FOODS on September 20, 2024 and sell it today you would earn a total of 2,363 from holding JJ SNACK FOODS or generate 17.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. JJ SNACK FOODS
Performance |
| Timeline |
| China Resources Beer |
| JJ SNACK FOODS |
China Resources and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and J+J SNACK
The main advantage of trading using opposite China Resources and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources 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.| China Resources vs. Ribbon Communications | China Resources vs. SUN ART RETAIL | China Resources vs. SK TELECOM TDADR | China Resources vs. SIDETRADE EO 1 |
| J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. SIVERS SEMICONDUCTORS AB | J+J SNACK vs. NorAm Drilling AS | J+J SNACK vs. Norsk Hydro ASA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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