Correlation Between J+J SNACK and BANK CENTRAL | JJ1.MU vs. BZG2.MU

Correlation Between J+J SNACK and BANK CENTRAL

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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

J+JBANKDiversified AwayJ+JBANKDiversified Away100%
-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between J+J and BANK is -0.63. 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 J+J SNACK is expected to generate 1.11 times less return on investment than BANK CENTRAL. In addition to that, J+J SNACK is 1.08 times more volatile than BANK CENTRAL ASIA. It trades about 0.02 of its total potential returns per unit of risk. BANK CENTRAL ASIA is currently generating about 0.03 per unit of volatility. If you would invest  51.00  in BANK CENTRAL ASIA on September 29, 2024 and sell it today you would earn a total of  7.00  from holding BANK CENTRAL ASIA or generate 13.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

JJ SNACK FOODS  vs.  BANK CENTRAL ASIA

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -505
JavaScript chart by amCharts 3.21.15JJ1 BZG2
       Timeline  
JJ SNACK FOODS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days JJ SNACK FOODS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, J+J SNACK is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec152154156158160162
BANK CENTRAL ASIA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BANK CENTRAL ASIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BANK CENTRAL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecDec0.570.580.590.60.610.620.630.640.65

J+J SNACK and BANK CENTRAL Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.17-2.37-1.58-0.780.00.791.592.393.19 0.10.20.30.4
JavaScript chart by amCharts 3.21.15JJ1 BZG2
       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.
The idea behind JJ SNACK FOODS and BANK CENTRAL ASIA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stocks Directory module to find actively traded stocks across global markets.

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