Correlation Between J+J SNACK and General Mills
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and General Mills 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 General Mills 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 General Mills, you can compare the effects of market volatilities on J+J SNACK and General Mills 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 General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and General Mills.
Diversification Opportunities for J+J SNACK and General Mills
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between J+J and General is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills 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 General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of J+J SNACK i.e., J+J SNACK and General Mills go up and down completely randomly.
Pair Corralation between J+J SNACK and General Mills
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.94 times more return on investment than General Mills. However, JJ SNACK FOODS is 1.06 times less risky than General Mills. It trades about 0.1 of its potential returns per unit of risk. General Mills is currently generating about -0.08 per unit of risk. If you would invest 15,400 in JJ SNACK FOODS on August 25, 2024 and sell it today you would earn a total of 400.00 from holding JJ SNACK FOODS or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. General Mills
Performance |
| Timeline |
| JJ SNACK FOODS |
| General Mills |
J+J SNACK and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and General Mills
The main advantage of trading using opposite J+J SNACK and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' long position.| J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. Origin Agritech | J+J SNACK vs. SIVERS SEMICONDUCTORS AB |
| General Mills vs. JJ SNACK FOODS | General Mills vs. SENECA FOODS A | General Mills vs. PENN NATL GAMING | General Mills vs. TROPHY GAMES DEV |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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