Correlation Between John B and J J
Can any of the company-specific risk be diversified away by investing in both John B and J J 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 John B and J J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John B Sanfilippo and J J Snack, you can compare the effects of market volatilities on John B and J J 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 John B with a short position of J J. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and J J.
Diversification Opportunities for John B and J J
Good diversification
The 3 months correlation between John and JJSF is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and J J Snack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J J Snack and John B 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 John B Sanfilippo are associated (or correlated) with J J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J J Snack has no effect on the direction of John B i.e., John B and J J go up and down completely randomly.
Pair Corralation between John B and J J
Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the J J. In addition to that, John B is 1.38 times more volatile than J J Snack. It trades about -0.13 of its total potential returns per unit of risk. J J Snack is currently generating about 0.13 per unit of volatility. If you would invest 16,547 in J J Snack on August 27, 2024 and sell it today you would earn a total of 853.00 from holding J J Snack or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John B Sanfilippo vs. J J Snack
Performance |
| Timeline |
| John B Sanfilippo |
| J J Snack |
John B and J J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and J J
The main advantage of trading using opposite John B and J J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B position performs unexpectedly, J J 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 will offset losses from the drop in J J's long position.| John B vs. Bellring Brands LLC | John B vs. Ingredion Incorporated | John B vs. Nomad Foods | John B vs. Simply Good Foods |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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