Correlation Between J J and Herbalife Nutrition
Can any of the company-specific risk be diversified away by investing in both J J and Herbalife Nutrition 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 and Herbalife Nutrition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J J Snack and Herbalife Nutrition, you can compare the effects of market volatilities on J J and Herbalife Nutrition 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 with a short position of Herbalife Nutrition. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and Herbalife Nutrition.
Diversification Opportunities for J J and Herbalife Nutrition
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JJSF and Herbalife is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and Herbalife Nutrition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herbalife Nutrition and J J 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 J J Snack are associated (or correlated) with Herbalife Nutrition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herbalife Nutrition has no effect on the direction of J J i.e., J J and Herbalife Nutrition go up and down completely randomly.
Pair Corralation between J J and Herbalife Nutrition
Given the investment horizon of 90 days J J Snack is expected to generate 0.42 times more return on investment than Herbalife Nutrition. However, J J Snack is 2.39 times less risky than Herbalife Nutrition. It trades about 0.04 of its potential returns per unit of risk. Herbalife Nutrition is currently generating about -0.02 per unit of risk. If you would invest 13,780 in J J Snack on August 27, 2024 and sell it today you would earn a total of 3,336 from holding J J Snack or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
J J Snack vs. Herbalife Nutrition
Performance |
| Timeline |
| J J Snack |
| Herbalife Nutrition |
J J and Herbalife Nutrition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J J and Herbalife Nutrition
The main advantage of trading using opposite J J and Herbalife Nutrition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J J position performs unexpectedly, Herbalife Nutrition 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 Herbalife Nutrition will offset losses from the drop in Herbalife Nutrition's long position.The idea behind J J Snack and Herbalife Nutrition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Herbalife Nutrition vs. Nomad Foods | Herbalife Nutrition vs. Bellring Brands LLC | Herbalife Nutrition vs. Pilgrims Pride Corp | Herbalife Nutrition vs. Ingredion Incorporated |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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