Correlation Between FLOW TRADERS and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and J+J SNACK 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 FLOW TRADERS and J+J SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and JJ SNACK FOODS, you can compare the effects of market volatilities on FLOW TRADERS and J+J SNACK 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 FLOW TRADERS with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and J+J SNACK.
Diversification Opportunities for FLOW TRADERS and J+J SNACK
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FLOW and J+J is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with J+J SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and J+J SNACK go up and down completely randomly.
Pair Corralation between FLOW TRADERS and J+J SNACK
Assuming the 90 days horizon FLOW TRADERS is expected to generate 1.02 times less return on investment than J+J SNACK. In addition to that, FLOW TRADERS is 1.81 times more volatile than JJ SNACK FOODS. It trades about 0.03 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.06 per unit of volatility. If you would invest 14,851 in JJ SNACK FOODS on August 31, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. JJ SNACK FOODS
Performance |
| Timeline |
| FLOW TRADERS LTD |
| JJ SNACK FOODS |
FLOW TRADERS and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and J+J SNACK
The main advantage of trading using opposite FLOW TRADERS and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, J+J SNACK 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 J+J SNACK will offset losses from the drop in J+J SNACK's long position.| FLOW TRADERS vs. Chunghwa Telecom Co | FLOW TRADERS vs. Astral Foods Limited | FLOW TRADERS vs. Singapore Telecommunications Limited | FLOW TRADERS vs. Infrastrutture Wireless Italiane |
| J+J SNACK vs. Danone SA | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. Origin Agritech |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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