Correlation Between J+J SNACK and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Summit Hotel 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 Summit Hotel 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 Summit Hotel Properties, you can compare the effects of market volatilities on J+J SNACK and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Summit Hotel.
Diversification Opportunities for J+J SNACK and Summit Hotel
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between J+J and Summit is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of J+J SNACK i.e., J+J SNACK and Summit Hotel go up and down completely randomly.
Pair Corralation between J+J SNACK and Summit Hotel
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.61 times more return on investment than Summit Hotel. However, JJ SNACK FOODS is 1.64 times less risky than Summit Hotel. It trades about 0.03 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.02 per unit of risk. If you would invest 13,645 in JJ SNACK FOODS on September 24, 2024 and sell it today you would earn a total of 2,355 from holding JJ SNACK FOODS or generate 17.26% 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. Summit Hotel Properties
Performance |
| Timeline |
| JJ SNACK FOODS |
| Summit Hotel Properties |
J+J SNACK and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Summit Hotel
The main advantage of trading using opposite J+J SNACK and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| J+J SNACK vs. Mowi ASA | J+J SNACK vs. LEROY SEAFOOD GRUNSPADR | J+J SNACK vs. Lery Seafood Group | J+J SNACK vs. Nisshin Seifun Group |
| Summit Hotel vs. ZURICH INSURANCE GROUP | Summit Hotel vs. PREMIER FOODS | Summit Hotel vs. MagnaChip Semiconductor Corp | Summit Hotel vs. JJ SNACK FOODS |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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