Correlation Between J+J SNACK and Air Lease
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Air Lease 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 Air Lease 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 Air Lease, you can compare the effects of market volatilities on J+J SNACK and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Air Lease.
Diversification Opportunities for J+J SNACK and Air Lease
Very weak diversification
The 3 months correlation between J+J and Air is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of J+J SNACK i.e., J+J SNACK and Air Lease go up and down completely randomly.
Pair Corralation between J+J SNACK and Air Lease
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the Air Lease. In addition to that, J+J SNACK is 1.58 times more volatile than Air Lease. It trades about -0.12 of its total potential returns per unit of risk. Air Lease is currently generating about 0.1 per unit of volatility. If you would invest 4,380 in Air Lease on November 28, 2024 and sell it today you would earn a total of 180.00 from holding Air Lease or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Air Lease
Performance |
| Timeline |
| JJ SNACK FOODS |
| Air Lease |
J+J SNACK and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Air Lease
The main advantage of trading using opposite J+J SNACK and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| J+J SNACK vs. Emperor Entertainment Hotel | J+J SNACK vs. Wyndham Hotels Resorts | J+J SNACK vs. Sotherly Hotels | J+J SNACK vs. Major Drilling Group |
| Air Lease vs. ARISTOCRAT LEISURE | Air Lease vs. PLAY2CHILL SA ZY | Air Lease vs. ANGLO ASIAN MINING | Air Lease vs. PLAYMATES HLDGS NEW |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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