Correlation Between J+J SNACK and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Japan Tobacco 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 Japan Tobacco 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 Japan Tobacco, you can compare the effects of market volatilities on J+J SNACK and Japan Tobacco 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 Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Japan Tobacco.
Diversification Opportunities for J+J SNACK and Japan Tobacco
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between J+J and Japan is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Japan Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco 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 Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco has no effect on the direction of J+J SNACK i.e., J+J SNACK and Japan Tobacco go up and down completely randomly.
Pair Corralation between J+J SNACK and Japan Tobacco
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.85 times more return on investment than Japan Tobacco. However, JJ SNACK FOODS is 1.18 times less risky than Japan Tobacco. It trades about 0.27 of its potential returns per unit of risk. Japan Tobacco is currently generating about 0.16 per unit of risk. If you would invest 15,200 in JJ SNACK FOODS on September 3, 2024 and sell it today you would earn a total of 1,100 from holding JJ SNACK FOODS or generate 7.24% 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. Japan Tobacco
Performance |
| Timeline |
| JJ SNACK FOODS |
| Japan Tobacco |
J+J SNACK and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Japan Tobacco
The main advantage of trading using opposite J+J SNACK and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Japan Tobacco 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 Japan Tobacco will offset losses from the drop in Japan Tobacco'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 |
| Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. JAPAN TOBACCO UNSPADR12 | Japan Tobacco vs. Imperial Brands PLC |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |