Correlation Between J+J SNACK and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Solstad Offshore 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 Solstad Offshore 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 Solstad Offshore ASA, you can compare the effects of market volatilities on J+J SNACK and Solstad Offshore 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 Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Solstad Offshore.
Diversification Opportunities for J+J SNACK and Solstad Offshore
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between J+J and Solstad is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA 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 Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of J+J SNACK i.e., J+J SNACK and Solstad Offshore go up and down completely randomly.
Pair Corralation between J+J SNACK and Solstad Offshore
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.37 times more return on investment than Solstad Offshore. However, JJ SNACK FOODS is 2.7 times less risky than Solstad Offshore. It trades about 0.06 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.02 per unit of risk. If you would invest 14,851 in JJ SNACK FOODS on September 3, 2024 and sell it today you would earn a total of 1,449 from holding JJ SNACK FOODS or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Solstad Offshore ASA
Performance |
| Timeline |
| JJ SNACK FOODS |
| Solstad Offshore ASA |
J+J SNACK and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Solstad Offshore
The main advantage of trading using opposite J+J SNACK and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore'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 |
| Solstad Offshore vs. Liberty Broadband | Solstad Offshore vs. CHINA EDUCATION GROUP | Solstad Offshore vs. BROADSTNET LEADL 00025 | Solstad Offshore vs. EEDUCATION ALBERT 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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