Correlation Between Biogen and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both Biogen 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 Biogen 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 Biogen Inc and JJ SNACK FOODS, you can compare the effects of market volatilities on Biogen 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 Biogen with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and J+J SNACK.
Diversification Opportunities for Biogen and J+J SNACK
Significant diversification
The 3 months correlation between Biogen and J+J is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc 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 Biogen 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 Biogen Inc 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 Biogen i.e., Biogen and J+J SNACK go up and down completely randomly.
Pair Corralation between Biogen and J+J SNACK
Assuming the 90 days trading horizon Biogen Inc is expected to generate 1.35 times more return on investment than J+J SNACK. However, Biogen is 1.35 times more volatile than JJ SNACK FOODS. It trades about -0.13 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about -0.58 per unit of risk. If you would invest 14,110 in Biogen Inc on October 21, 2024 and sell it today you would lose (495.00) from holding Biogen Inc or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biogen Inc vs. JJ SNACK FOODS
Performance |
| Timeline |
| Biogen Inc |
| JJ SNACK FOODS |
Biogen and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and J+J SNACK
The main advantage of trading using opposite Biogen and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen 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.| Biogen vs. PSI Software AG | Biogen vs. CyberArk Software | Biogen vs. AM EAGLE OUTFITTERS | Biogen vs. SINGAPORE AIRLINES |
| J+J SNACK vs. SLR Investment Corp | J+J SNACK vs. Keck Seng Investments | J+J SNACK vs. AGNC INVESTMENT | J+J SNACK vs. Daito Trust Construction |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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