Correlation Between CAL MAINE and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both CAL MAINE 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 CAL MAINE 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 CAL MAINE FOODS and JJ SNACK FOODS, you can compare the effects of market volatilities on CAL MAINE 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 CAL MAINE with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and J+J SNACK.
Diversification Opportunities for CAL MAINE and J+J SNACK
Poor diversification
The 3 months correlation between CAL and J+J is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS 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 CAL MAINE 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 CAL MAINE FOODS 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 CAL MAINE i.e., CAL MAINE and J+J SNACK go up and down completely randomly.
Pair Corralation between CAL MAINE and J+J SNACK
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 1.66 times more return on investment than J+J SNACK. However, CAL MAINE is 1.66 times more volatile than JJ SNACK FOODS. It trades about 0.07 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 4,798 in CAL MAINE FOODS on September 3, 2024 and sell it today you would earn a total of 4,342 from holding CAL MAINE FOODS or generate 90.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAL MAINE FOODS vs. JJ SNACK FOODS
Performance |
| Timeline |
| CAL MAINE FOODS |
| JJ SNACK FOODS |
CAL MAINE and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and J+J SNACK
The main advantage of trading using opposite CAL MAINE and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE 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.| CAL MAINE vs. LG Display Co | CAL MAINE vs. USWE SPORTS AB | CAL MAINE vs. SINGAPORE AIRLINES | CAL MAINE vs. VIAPLAY GROUP AB |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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