Correlation Between PENN NATL and JJ SNACK
Can any of the company-specific risk be diversified away by investing in both PENN NATL and JJ 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 PENN NATL and JJ SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN NATL GAMING and JJ SNACK FOODS, you can compare the effects of market volatilities on PENN NATL and JJ 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 PENN NATL with a short position of JJ SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and JJ SNACK.
Diversification Opportunities for PENN NATL and JJ SNACK
Poor diversification
The 3 months correlation between PENN and JJ1 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING 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 PENN NATL 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 PENN NATL GAMING are associated (or correlated) with JJ 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 PENN NATL i.e., PENN NATL and JJ SNACK go up and down completely randomly.
Pair Corralation between PENN NATL and JJ SNACK
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 1.95 times more return on investment than JJ SNACK. However, PENN NATL is 1.95 times more volatile than JJ SNACK FOODS. It trades about 0.18 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.2 per unit of risk. If you would invest 1,832 in PENN NATL GAMING on August 30, 2024 and sell it today you would earn a total of 184.00 from holding PENN NATL GAMING or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. JJ SNACK FOODS
Performance |
| Timeline |
| PENN NATL GAMING |
| JJ SNACK FOODS |
PENN NATL and JJ SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and JJ SNACK
The main advantage of trading using opposite PENN NATL and JJ SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, JJ 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 JJ SNACK will offset losses from the drop in JJ SNACK's long position.| PENN NATL vs. Apple Inc | PENN NATL vs. Apple Inc | PENN NATL vs. Superior Plus Corp | PENN NATL vs. SIVERS SEMICONDUCTORS AB |
| JJ SNACK vs. Iridium Communications | JJ SNACK vs. Hemisphere Energy Corp | JJ SNACK vs. SBA Communications Corp | JJ SNACK vs. Perseus Mining Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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