Correlation Between J+J SNACK and Rai Way
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Rai Way 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 J+J SNACK and Rai Way into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJ SNACK FOODS and Rai Way SpA, you can compare the effects of market volatilities on J+J SNACK and Rai Way 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 J+J SNACK with a short position of Rai Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Rai Way.
Diversification Opportunities for J+J SNACK and Rai Way
Good diversification
The 3 months correlation between J+J and Rai is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Rai Way SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rai Way SpA and J+J SNACK 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 JJ SNACK FOODS are associated (or correlated) with Rai Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rai Way SpA has no effect on the direction of J+J SNACK i.e., J+J SNACK and Rai Way go up and down completely randomly.
Pair Corralation between J+J SNACK and Rai Way
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.87 times more return on investment than Rai Way. However, JJ SNACK FOODS is 1.16 times less risky than Rai Way. It trades about 0.2 of its potential returns per unit of risk. Rai Way SpA is currently generating about -0.1 per unit of risk. If you would invest 15,400 in JJ SNACK FOODS on August 31, 2024 and sell it today you would earn a total of 900.00 from holding JJ SNACK FOODS or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Rai Way SpA
Performance |
| Timeline |
| JJ SNACK FOODS |
| Rai Way SpA |
J+J SNACK and Rai Way Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Rai Way
The main advantage of trading using opposite J+J SNACK and Rai Way positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Rai Way 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 Rai Way will offset losses from the drop in Rai Way's long position.| 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 |
| Rai Way vs. JJ SNACK FOODS | Rai Way vs. THAI BEVERAGE | Rai Way vs. Tyson Foods | Rai Way vs. Suntory Beverage Food |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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