Correlation Between J+J SNACK and SEIKO EPSON
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and SEIKO EPSON 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 SEIKO EPSON 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 SEIKO EPSON PADR, you can compare the effects of market volatilities on J+J SNACK and SEIKO EPSON 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 SEIKO EPSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and SEIKO EPSON.
Diversification Opportunities for J+J SNACK and SEIKO EPSON
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between J+J and SEIKO is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and SEIKO EPSON PADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEIKO EPSON PADR 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 SEIKO EPSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEIKO EPSON PADR has no effect on the direction of J+J SNACK i.e., J+J SNACK and SEIKO EPSON go up and down completely randomly.
Pair Corralation between J+J SNACK and SEIKO EPSON
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.44 times more return on investment than SEIKO EPSON. However, JJ SNACK FOODS is 2.29 times less risky than SEIKO EPSON. It trades about 0.26 of its potential returns per unit of risk. SEIKO EPSON PADR is currently generating about -0.01 per unit of risk. If you would invest 15,200 in JJ SNACK FOODS on September 1, 2024 and sell it today you would earn a total of 1,100 from holding JJ SNACK FOODS or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. SEIKO EPSON PADR
Performance |
| Timeline |
| JJ SNACK FOODS |
| SEIKO EPSON PADR |
J+J SNACK and SEIKO EPSON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and SEIKO EPSON
The main advantage of trading using opposite J+J SNACK and SEIKO EPSON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, SEIKO EPSON 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 SEIKO EPSON will offset losses from the drop in SEIKO EPSON's long position.| J+J SNACK vs. GigaMedia | J+J SNACK vs. Safety Insurance Group | J+J SNACK vs. FUTURE GAMING GRP | J+J SNACK vs. Zurich Insurance Group |
| SEIKO EPSON vs. Superior Plus Corp | SEIKO EPSON vs. NMI Holdings | SEIKO EPSON vs. Origin Agritech | SEIKO EPSON vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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