Correlation Between J+J SNACK and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH, you can compare the effects of market volatilities on J+J SNACK and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and FEMALE HEALTH.
Diversification Opportunities for J+J SNACK and FEMALE HEALTH
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between J+J and FEMALE is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of J+J SNACK i.e., J+J SNACK and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between J+J SNACK and FEMALE HEALTH
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.3 times more return on investment than FEMALE HEALTH. However, JJ SNACK FOODS is 3.39 times less risky than FEMALE HEALTH. It trades about 0.27 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about 0.0 per unit of risk. If you would invest 15,200 in JJ SNACK FOODS on September 3, 2024 and sell it today you would earn a total of 1,100 from holding JJ SNACK FOODS or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. FEMALE HEALTH
Performance |
| Timeline |
| JJ SNACK FOODS |
| FEMALE HEALTH |
J+J SNACK and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and FEMALE HEALTH
The main advantage of trading using opposite J+J SNACK and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| J+J SNACK vs. GOLD ROAD RES | J+J SNACK vs. CosmoSteel Holdings Limited | J+J SNACK vs. Caltagirone SpA | J+J SNACK vs. TEXAS ROADHOUSE |
| FEMALE HEALTH vs. Universal Display | FEMALE HEALTH vs. SALESFORCE INC CDR | FEMALE HEALTH vs. Entravision Communications | FEMALE HEALTH vs. ULTRA CLEAN HLDGS |
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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