Correlation Between J J and Post Holdings
Can any of the company-specific risk be diversified away by investing in both J J and Post Holdings 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 Post Holdings 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 Post Holdings, you can compare the effects of market volatilities on J J and Post Holdings 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 Post Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and Post Holdings.
Diversification Opportunities for J J and Post Holdings
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between JJSF and Post is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings 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 Post Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post Holdings has no effect on the direction of J J i.e., J J and Post Holdings go up and down completely randomly.
Pair Corralation between J J and Post Holdings
Given the investment horizon of 90 days J J is expected to generate 3.09 times less return on investment than Post Holdings. In addition to that, J J is 1.45 times more volatile than Post Holdings. It trades about 0.02 of its total potential returns per unit of risk. Post Holdings is currently generating about 0.1 per unit of volatility. If you would invest 8,468 in Post Holdings on August 25, 2024 and sell it today you would earn a total of 3,112 from holding Post Holdings or generate 36.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J J Snack vs. Post Holdings
Performance |
| Timeline |
| J J Snack |
| Post Holdings |
J J and Post Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J J and Post Holdings
The main advantage of trading using opposite J J and Post Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J J position performs unexpectedly, Post Holdings 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 Post Holdings will offset losses from the drop in Post Holdings' long position.The idea behind J J Snack and Post Holdings 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.| Post Holdings vs. Bellring Brands LLC | Post Holdings vs. Treehouse Foods | Post Holdings vs. Ingredion Incorporated | Post Holdings vs. JM Smucker |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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