Correlation Between J+J SNACK and Sherwin Williams
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Sherwin Williams 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 Sherwin Williams 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 The Sherwin Williams, you can compare the effects of market volatilities on J+J SNACK and Sherwin Williams 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 Sherwin Williams. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Sherwin Williams.
Diversification Opportunities for J+J SNACK and Sherwin Williams
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between J+J and Sherwin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and The Sherwin Williams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams 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 Sherwin Williams. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherwin Williams has no effect on the direction of J+J SNACK i.e., J+J SNACK and Sherwin Williams go up and down completely randomly.
Pair Corralation between J+J SNACK and Sherwin Williams
Assuming the 90 days trading horizon J+J SNACK is expected to generate 3.07 times less return on investment than Sherwin Williams. But when comparing it to its historical volatility, JJ SNACK FOODS is 1.41 times less risky than Sherwin Williams. It trades about 0.06 of its potential returns per unit of risk. The Sherwin Williams is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 27,934 in The Sherwin Williams on September 3, 2024 and sell it today you would earn a total of 9,631 from holding The Sherwin Williams or generate 34.48% 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. The Sherwin Williams
Performance |
| Timeline |
| JJ SNACK FOODS |
| Sherwin Williams |
J+J SNACK and Sherwin Williams Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Sherwin Williams
The main advantage of trading using opposite J+J SNACK and Sherwin Williams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Sherwin Williams 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 Sherwin Williams will offset losses from the drop in Sherwin Williams' 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 |
| Sherwin Williams vs. Corsair Gaming | Sherwin Williams vs. INSURANCE AUST GRP | Sherwin Williams vs. Selective Insurance Group | Sherwin Williams vs. HF SINCLAIR P |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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