Correlation Between J+J SNACK and AECOM
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and AECOM 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 AECOM 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 AECOM, you can compare the effects of market volatilities on J+J SNACK and AECOM 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 AECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and AECOM.
Diversification Opportunities for J+J SNACK and AECOM
Poor diversification
The 3 months correlation between J+J and AECOM is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and AECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM 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 AECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM has no effect on the direction of J+J SNACK i.e., J+J SNACK and AECOM go up and down completely randomly.
Pair Corralation between J+J SNACK and AECOM
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the AECOM. In addition to that, J+J SNACK is 2.18 times more volatile than AECOM. It trades about -0.1 of its total potential returns per unit of risk. AECOM is currently generating about -0.12 per unit of volatility. If you would invest 10,000 in AECOM on December 4, 2024 and sell it today you would lose (400.00) from holding AECOM or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. AECOM
Performance |
| Timeline |
| JJ SNACK FOODS |
| AECOM |
J+J SNACK and AECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and AECOM
The main advantage of trading using opposite J+J SNACK and AECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, AECOM 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 AECOM will offset losses from the drop in AECOM's 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 |
| AECOM vs. Globex Mining Enterprises | AECOM vs. Japan Tobacco | AECOM vs. COPLAND ROAD CAPITAL | AECOM vs. Transport International Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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