Correlation Between J+J SNACK and Oji Holdings
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Oji Holdings 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 Oji Holdings 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 Oji Holdings, you can compare the effects of market volatilities on J+J SNACK and Oji Holdings 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 Oji Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Oji Holdings.
Diversification Opportunities for J+J SNACK and Oji Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between J+J and Oji is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Oji Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oji Holdings 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 Oji Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oji Holdings has no effect on the direction of J+J SNACK i.e., J+J SNACK and Oji Holdings go up and down completely randomly.
Pair Corralation between J+J SNACK and Oji Holdings
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 1.04 times more return on investment than Oji Holdings. However, J+J SNACK is 1.04 times more volatile than Oji Holdings. It trades about 0.15 of its potential returns per unit of risk. Oji Holdings is currently generating about 0.1 per unit of risk. If you would invest 15,400 in JJ SNACK FOODS on August 28, 2024 and sell it today you would earn a total of 600.00 from holding JJ SNACK FOODS or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Oji Holdings
Performance |
| Timeline |
| JJ SNACK FOODS |
| Oji Holdings |
J+J SNACK and Oji Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Oji Holdings
The main advantage of trading using opposite J+J SNACK and Oji Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Oji Holdings 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 Oji Holdings will offset losses from the drop in Oji Holdings' 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 |
| Oji Holdings vs. UPM Kymmene Oyj | Oji Holdings vs. STORA ENSO OYJ | Oji Holdings vs. Stora Enso Oyj | Oji Holdings vs. Suzano 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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