Correlation Between J+J SNACK and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Hemisphere Energy 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 Hemisphere Energy 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 Hemisphere Energy Corp, you can compare the effects of market volatilities on J+J SNACK and Hemisphere Energy 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 Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Hemisphere Energy.
Diversification Opportunities for J+J SNACK and Hemisphere Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between J+J and Hemisphere is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Hemisphere Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy Corp 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 Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy Corp has no effect on the direction of J+J SNACK i.e., J+J SNACK and Hemisphere Energy go up and down completely randomly.
Pair Corralation between J+J SNACK and Hemisphere Energy
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the Hemisphere Energy. But the stock apears to be less risky and, when comparing its historical volatility, JJ SNACK FOODS is 2.27 times less risky than Hemisphere Energy. The stock trades about -0.04 of its potential returns per unit of risk. The Hemisphere Energy Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 121.00 in Hemisphere Energy Corp on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Hemisphere Energy Corp or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Hemisphere Energy Corp
Performance |
| Timeline |
| JJ SNACK FOODS |
| Hemisphere Energy Corp |
J+J SNACK and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Hemisphere Energy
The main advantage of trading using opposite J+J SNACK and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Hemisphere Energy 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy's long position.| J+J SNACK vs. Hormel Foods | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. SIVERS SEMICONDUCTORS AB | J+J SNACK vs. NorAm Drilling AS |
| Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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