Correlation Between J+J SNACK and Industrial
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Industrial 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 Industrial 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 Industrial and Commercial, you can compare the effects of market volatilities on J+J SNACK and Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Industrial.
Diversification Opportunities for J+J SNACK and Industrial
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between J+J and Industrial is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of J+J SNACK i.e., J+J SNACK and Industrial go up and down completely randomly.
Pair Corralation between J+J SNACK and Industrial
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the Industrial. But the stock apears to be less risky and, when comparing its historical volatility, JJ SNACK FOODS is 6.73 times less risky than Industrial. The stock trades about -0.46 of its potential returns per unit of risk. The Industrial and Commercial is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Industrial and Commercial on October 7, 2024 and sell it today you would earn a total of 17.00 from holding Industrial and Commercial or generate 37.78% 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. Industrial and Commercial
Performance |
| Timeline |
| JJ SNACK FOODS |
| Industrial and Commercial |
J+J SNACK and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Industrial
The main advantage of trading using opposite J+J SNACK and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.| J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. SIVERS SEMICONDUCTORS AB | J+J SNACK vs. Talanx AG |
| Industrial vs. Magnachip Semiconductor | Industrial vs. Tower Semiconductor | Industrial vs. Dave Busters Entertainment | Industrial vs. Nordic Semiconductor ASA |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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