Correlation Between J+J SNACK and AUSTEVOLL SEAFOOD
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD, you can compare the effects of market volatilities on J+J SNACK and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and AUSTEVOLL SEAFOOD.
Diversification Opportunities for J+J SNACK and AUSTEVOLL SEAFOOD
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between J+J and AUSTEVOLL is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and AUSTEVOLL SEAFOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSTEVOLL SEAFOOD has no effect on the direction of J+J SNACK i.e., J+J SNACK and AUSTEVOLL SEAFOOD go up and down completely randomly.
Pair Corralation between J+J SNACK and AUSTEVOLL SEAFOOD
Assuming the 90 days trading horizon J+J SNACK is expected to generate 7.3 times less return on investment than AUSTEVOLL SEAFOOD. But when comparing it to its historical volatility, JJ SNACK FOODS is 5.53 times less risky than AUSTEVOLL SEAFOOD. It trades about 0.07 of its potential returns per unit of risk. AUSTEVOLL SEAFOOD is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 302.00 in AUSTEVOLL SEAFOOD on August 27, 2024 and sell it today you would earn a total of 562.00 from holding AUSTEVOLL SEAFOOD or generate 186.09% 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. AUSTEVOLL SEAFOOD
Performance |
| Timeline |
| JJ SNACK FOODS |
| AUSTEVOLL SEAFOOD |
J+J SNACK and AUSTEVOLL SEAFOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and AUSTEVOLL SEAFOOD
The main advantage of trading using opposite J+J SNACK and AUSTEVOLL SEAFOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD will offset losses from the drop in AUSTEVOLL SEAFOOD's long position.| J+J SNACK vs. Applied Materials | J+J SNACK vs. FORMPIPE SOFTWARE AB | J+J SNACK vs. Sumitomo Rubber Industries | J+J SNACK vs. APPLIED MATERIALS |
| AUSTEVOLL SEAFOOD vs. Apple Inc | AUSTEVOLL SEAFOOD vs. Apple Inc | AUSTEVOLL SEAFOOD vs. Apple Inc | AUSTEVOLL SEAFOOD vs. Microsoft |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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