Correlation Between J+J SNACK and Nucor
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Nucor 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 Nucor 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 Nucor, you can compare the effects of market volatilities on J+J SNACK and Nucor 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 Nucor. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Nucor.
Diversification Opportunities for J+J SNACK and Nucor
Very poor diversification
The 3 months correlation between J+J and Nucor is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Nucor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor 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 Nucor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor has no effect on the direction of J+J SNACK i.e., J+J SNACK and Nucor go up and down completely randomly.
Pair Corralation between J+J SNACK and Nucor
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.67 times more return on investment than Nucor. However, JJ SNACK FOODS is 1.48 times less risky than Nucor. It trades about 0.02 of its potential returns per unit of risk. Nucor is currently generating about 0.01 per unit of risk. If you would invest 15,482 in JJ SNACK FOODS on September 3, 2024 and sell it today you would earn a total of 818.00 from holding JJ SNACK FOODS or generate 5.28% 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. Nucor
Performance |
| Timeline |
| JJ SNACK FOODS |
| Nucor |
J+J SNACK and Nucor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Nucor
The main advantage of trading using opposite J+J SNACK and Nucor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Nucor 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 Nucor will offset losses from the drop in Nucor'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 |
| Nucor vs. SCIENCE IN SPORT | Nucor vs. Sporttotal AG | Nucor vs. DICKS Sporting Goods | Nucor vs. MOVIE GAMES SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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