Correlation Between J+J SNACK and Natural Health
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Natural Health 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 Natural Health 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 Natural Health Trends, you can compare the effects of market volatilities on J+J SNACK and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Natural Health.
Diversification Opportunities for J+J SNACK and Natural Health
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between J+J and Natural is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of J+J SNACK i.e., J+J SNACK and Natural Health go up and down completely randomly.
Pair Corralation between J+J SNACK and Natural Health
Assuming the 90 days trading horizon J+J SNACK is expected to generate 1.27 times less return on investment than Natural Health. But when comparing it to its historical volatility, JJ SNACK FOODS is 2.64 times less risky than Natural Health. It trades about 0.12 of its potential returns per unit of risk. Natural Health Trends is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 498.00 in Natural Health Trends on August 28, 2024 and sell it today you would earn a total of 27.00 from holding Natural Health Trends or generate 5.42% 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. Natural Health Trends
Performance |
| Timeline |
| JJ SNACK FOODS |
| Natural Health Trends |
J+J SNACK and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Natural Health
The main advantage of trading using opposite J+J SNACK and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. Origin Agritech | J+J SNACK vs. SIVERS SEMICONDUCTORS AB |
| Natural Health vs. COMBA TELECOM SYST | Natural Health vs. EAGLE MATERIALS | Natural Health vs. Cogent Communications Holdings | Natural Health vs. SK TELECOM TDADR |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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