Correlation Between J+J SNACK and H FARM
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and H FARM 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 H FARM 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 H FARM SPA, you can compare the effects of market volatilities on J+J SNACK and H FARM 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 H FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and H FARM.
Diversification Opportunities for J+J SNACK and H FARM
Excellent diversification
The 3 months correlation between J+J and 5JQ is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM 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 H FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of J+J SNACK i.e., J+J SNACK and H FARM go up and down completely randomly.
Pair Corralation between J+J SNACK and H FARM
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the H FARM. But the stock apears to be less risky and, when comparing its historical volatility, JJ SNACK FOODS is 3.92 times less risky than H FARM. The stock trades about -0.01 of its potential returns per unit of risk. The H FARM SPA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 20.00 in H FARM SPA on November 27, 2024 and sell it today you would lose (7.00) from holding H FARM SPA or give up 35.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. H FARM SPA
Performance |
| Timeline |
| JJ SNACK FOODS |
| H FARM SPA |
J+J SNACK and H FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and H FARM
The main advantage of trading using opposite J+J SNACK and H FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, H FARM 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 H FARM will offset losses from the drop in H FARM's long position.| J+J SNACK vs. Nestl SA | J+J SNACK vs. Kraft Heinz Co | J+J SNACK vs. General Mills | J+J SNACK vs. General Mills |
| H FARM vs. Calibre Mining Corp | H FARM vs. Ringmetall SE | H FARM vs. Casio Computer CoLtd | H FARM vs. BC TECHNOLOGY GROUP |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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