Correlation Between GEELY AUTOMOBILE and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE and JJ SNACK FOODS, you can compare the effects of market volatilities on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and J+J SNACK.
Diversification Opportunities for GEELY AUTOMOBILE and J+J SNACK
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEELY and J+J is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and J+J SNACK go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and J+J SNACK
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 2.25 times less return on investment than J+J SNACK. In addition to that, GEELY AUTOMOBILE is 2.16 times more volatile than JJ SNACK FOODS. It trades about 0.05 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.26 per unit of volatility. If you would invest 15,200 in JJ SNACK FOODS on September 2, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. JJ SNACK FOODS
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| JJ SNACK FOODS |
GEELY AUTOMOBILE and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and J+J SNACK
The main advantage of trading using opposite GEELY AUTOMOBILE and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE 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.| GEELY AUTOMOBILE vs. SIVERS SEMICONDUCTORS AB | GEELY AUTOMOBILE vs. Darden Restaurants | GEELY AUTOMOBILE vs. Reliance Steel Aluminum | GEELY AUTOMOBILE vs. Q2M Managementberatung AG |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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