Correlation Between JJ SNACK and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both JJ SNACK and FUYO GENERAL 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 JJ SNACK and FUYO GENERAL 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 FUYO GENERAL LEASE, you can compare the effects of market volatilities on JJ SNACK and FUYO GENERAL 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 JJ SNACK with a short position of FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of JJ SNACK and FUYO GENERAL.
Diversification Opportunities for JJ SNACK and FUYO GENERAL
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between JJ1 and FUYO is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE and JJ 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of JJ SNACK i.e., JJ SNACK and FUYO GENERAL go up and down completely randomly.
Pair Corralation between JJ SNACK and FUYO GENERAL
Assuming the 90 days trading horizon JJ SNACK is expected to generate 1.37 times less return on investment than FUYO GENERAL. But when comparing it to its historical volatility, JJ SNACK FOODS is 1.02 times less risky than FUYO GENERAL. It trades about 0.2 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 6,450 in FUYO GENERAL LEASE on August 30, 2024 and sell it today you would earn a total of 550.00 from holding FUYO GENERAL LEASE or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
JJ SNACK FOODS vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| JJ SNACK FOODS |
| FUYO GENERAL LEASE |
JJ SNACK and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JJ SNACK and FUYO GENERAL
The main advantage of trading using opposite JJ SNACK and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJ SNACK position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| JJ SNACK vs. SCANDMEDICAL SOLDK 040 | JJ SNACK vs. Clearside Biomedical | JJ SNACK vs. Caltagirone SpA | JJ SNACK vs. Tianjin Capital Environmental |
| FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB | FUYO GENERAL vs. Talanx AG | FUYO GENERAL vs. 2G ENERGY |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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