Correlation Between J+J SNACK and BANK CENTRAL
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and BANK CENTRAL 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 BANK CENTRAL 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 BANK CENTRAL ASIA, you can compare the effects of market volatilities on J+J SNACK and BANK CENTRAL 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 BANK CENTRAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and BANK CENTRAL.
Diversification Opportunities for J+J SNACK and BANK CENTRAL
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between J+J and BANK is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and BANK CENTRAL ASIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK CENTRAL ASIA 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 BANK CENTRAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK CENTRAL ASIA has no effect on the direction of J+J SNACK i.e., J+J SNACK and BANK CENTRAL go up and down completely randomly.
Pair Corralation between J+J SNACK and BANK CENTRAL
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the BANK CENTRAL. But the stock apears to be less risky and, when comparing its historical volatility, JJ SNACK FOODS is 2.95 times less risky than BANK CENTRAL. The stock trades about -0.04 of its potential returns per unit of risk. The BANK CENTRAL ASIA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 56.00 in BANK CENTRAL ASIA on September 12, 2024 and sell it today you would earn a total of 3.00 from holding BANK CENTRAL ASIA or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
JJ SNACK FOODS vs. BANK CENTRAL ASIA
Performance |
| Timeline |
| JJ SNACK FOODS |
| BANK CENTRAL ASIA |
J+J SNACK and BANK CENTRAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and BANK CENTRAL
The main advantage of trading using opposite J+J SNACK and BANK CENTRAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, BANK CENTRAL 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 BANK CENTRAL will offset losses from the drop in BANK CENTRAL's long position.| J+J SNACK vs. Hormel Foods | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. SIVERS SEMICONDUCTORS AB | J+J SNACK vs. NorAm Drilling AS |
| BANK CENTRAL vs. NISSIN FOODS HLDGS | BANK CENTRAL vs. COFCO Joycome Foods | BANK CENTRAL vs. Public Storage | BANK CENTRAL vs. JJ SNACK 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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