Correlation Between J+J SNACK and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and NMI Holdings 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 NMI Holdings 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 NMI Holdings, you can compare the effects of market volatilities on J+J SNACK and NMI Holdings 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 NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and NMI Holdings.
Diversification Opportunities for J+J SNACK and NMI Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between J+J and NMI is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings 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 NMI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMI Holdings has no effect on the direction of J+J SNACK i.e., J+J SNACK and NMI Holdings go up and down completely randomly.
Pair Corralation between J+J SNACK and NMI Holdings
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the NMI Holdings. But the stock apears to be less risky and, when comparing its historical volatility, JJ SNACK FOODS is 1.04 times less risky than NMI Holdings. The stock trades about -0.09 of its potential returns per unit of risk. The NMI Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,740 in NMI Holdings on December 4, 2024 and sell it today you would lose (260.00) from holding NMI Holdings or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
JJ SNACK FOODS vs. NMI Holdings
Performance |
| Timeline |
| JJ SNACK FOODS |
| NMI Holdings |
J+J SNACK and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and NMI Holdings
The main advantage of trading using opposite J+J SNACK and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, NMI Holdings 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 NMI Holdings will offset losses from the drop in NMI Holdings' long position.| J+J SNACK vs. GOME Retail Holdings | J+J SNACK vs. BURLINGTON STORES | J+J SNACK vs. MARKET VECTR RETAIL | J+J SNACK vs. RESMINING UNSPADR10 |
| NMI Holdings vs. tokentus investment AG | NMI Holdings vs. Gladstone Investment | NMI Holdings vs. PennantPark Investment | NMI Holdings vs. JLF INVESTMENT |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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