Correlation Between J+J SNACK and Air New
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Air New 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 New 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 New Zealand, you can compare the effects of market volatilities on J+J SNACK and Air New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Air New.
Diversification Opportunities for J+J SNACK and Air New
Modest diversification
The 3 months correlation between J+J and Air is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of J+J SNACK i.e., J+J SNACK and Air New go up and down completely randomly.
Pair Corralation between J+J SNACK and Air New
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.85 times more return on investment than Air New. However, JJ SNACK FOODS is 1.18 times less risky than Air New. It trades about 0.06 of its potential returns per unit of risk. Air New Zealand is currently generating about 0.04 per unit of risk. If you would invest 14,851 in JJ SNACK FOODS on August 31, 2024 and sell it today you would earn a total of 1,449 from holding JJ SNACK FOODS or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Air New Zealand
Performance |
| Timeline |
| JJ SNACK FOODS |
| Air New Zealand |
J+J SNACK and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Air New
The main advantage of trading using opposite J+J SNACK and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Air New 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 New will offset losses from the drop in Air New's long position.| J+J SNACK vs. Danone SA | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. Origin Agritech |
| Air New vs. SIVERS SEMICONDUCTORS AB | Air New vs. Darden Restaurants | Air New vs. Reliance Steel Aluminum | Air New vs. Q2M Managementberatung AG |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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