Correlation Between J+J SNACK and Gentex
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on J+J SNACK and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Gentex.
Diversification Opportunities for J+J SNACK and Gentex
Poor diversification
The 3 months correlation between J+J and Gentex is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of J+J SNACK i.e., J+J SNACK and Gentex go up and down completely randomly.
Pair Corralation between J+J SNACK and Gentex
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the Gentex. In addition to that, J+J SNACK is 1.28 times more volatile than Gentex. It trades about -0.58 of its total potential returns per unit of risk. Gentex is currently generating about -0.59 per unit of volatility. If you would invest 2,907 in Gentex on October 13, 2024 and sell it today you would lose (247.00) from holding Gentex or give up 8.5% 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. Gentex
Performance |
| Timeline |
| JJ SNACK FOODS |
| Gentex |
J+J SNACK and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Gentex
The main advantage of trading using opposite J+J SNACK and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.| J+J SNACK vs. Townsquare Media | J+J SNACK vs. Commonwealth Bank of | J+J SNACK vs. SUN LIFE FINANCIAL | J+J SNACK vs. CanSino Biologics |
| Gentex vs. Gladstone Investment | Gentex vs. Air Transport Services | Gentex vs. ECHO INVESTMENT ZY | Gentex vs. BROADWIND ENRGY |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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