Correlation Between J+J SNACK and HeidelbergCement
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and HeidelbergCement 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 HeidelbergCement 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 HeidelbergCement AG, you can compare the effects of market volatilities on J+J SNACK and HeidelbergCement 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 HeidelbergCement. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and HeidelbergCement.
Diversification Opportunities for J+J SNACK and HeidelbergCement
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between J+J and HeidelbergCement is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and HeidelbergCement AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeidelbergCement 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 HeidelbergCement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeidelbergCement has no effect on the direction of J+J SNACK i.e., J+J SNACK and HeidelbergCement go up and down completely randomly.
Pair Corralation between J+J SNACK and HeidelbergCement
Assuming the 90 days trading horizon J+J SNACK is expected to generate 3.44 times less return on investment than HeidelbergCement. But when comparing it to its historical volatility, JJ SNACK FOODS is 1.65 times less risky than HeidelbergCement. It trades about 0.11 of its potential returns per unit of risk. HeidelbergCement AG is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 9,380 in HeidelbergCement AG on September 3, 2024 and sell it today you would earn a total of 2,520 from holding HeidelbergCement AG or generate 26.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. HeidelbergCement AG
Performance |
| Timeline |
| JJ SNACK FOODS |
| HeidelbergCement |
J+J SNACK and HeidelbergCement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and HeidelbergCement
The main advantage of trading using opposite J+J SNACK and HeidelbergCement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, HeidelbergCement 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 HeidelbergCement will offset losses from the drop in HeidelbergCement'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 |
| HeidelbergCement vs. FANDIFI TECHNOLOGY P | HeidelbergCement vs. COFCO Joycome Foods | HeidelbergCement vs. JJ SNACK FOODS | HeidelbergCement vs. AECOM TECHNOLOGY |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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