Correlation Between J+J SNACK and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks PLC, you can compare the effects of market volatilities on J+J SNACK and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Fevertree Drinks.
Diversification Opportunities for J+J SNACK and Fevertree Drinks
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between J+J and Fevertree is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Fevertree Drinks PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks PLC 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks PLC has no effect on the direction of J+J SNACK i.e., J+J SNACK and Fevertree Drinks go up and down completely randomly.
Pair Corralation between J+J SNACK and Fevertree Drinks
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the Fevertree Drinks. But the stock apears to be less risky and, when comparing its historical volatility, JJ SNACK FOODS is 1.63 times less risky than Fevertree Drinks. The stock trades about -0.16 of its potential returns per unit of risk. The Fevertree Drinks PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 795.00 in Fevertree Drinks PLC on December 3, 2024 and sell it today you would earn a total of 20.00 from holding Fevertree Drinks PLC or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Fevertree Drinks PLC
Performance |
| Timeline |
| JJ SNACK FOODS |
| Fevertree Drinks PLC |
J+J SNACK and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Fevertree Drinks
The main advantage of trading using opposite J+J SNACK and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| J+J SNACK vs. Cass Information Systems | J+J SNACK vs. Cairo Communication SpA | J+J SNACK vs. SmarTone Telecommunications Holdings | J+J SNACK vs. CHINA TELECOM H |
| Fevertree Drinks vs. Strategic Education | Fevertree Drinks vs. Aristocrat Leisure Limited | Fevertree Drinks vs. CHINA EDUCATION GROUP | Fevertree Drinks vs. STRAYER EDUCATION |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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