Correlation Between Caltagirone SpA and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both Caltagirone SpA 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 Caltagirone SpA 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 Caltagirone SpA and JJ SNACK FOODS, you can compare the effects of market volatilities on Caltagirone SpA 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 Caltagirone SpA with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and J+J SNACK.
Diversification Opportunities for Caltagirone SpA and J+J SNACK
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caltagirone and J+J is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA 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 Caltagirone SpA 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 Caltagirone SpA 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 Caltagirone SpA i.e., Caltagirone SpA and J+J SNACK go up and down completely randomly.
Pair Corralation between Caltagirone SpA and J+J SNACK
Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 1.6 times more return on investment than J+J SNACK. However, Caltagirone SpA is 1.6 times more volatile than JJ SNACK FOODS. It trades about 0.07 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.03 per unit of risk. If you would invest 357.00 in Caltagirone SpA on September 2, 2024 and sell it today you would earn a total of 237.00 from holding Caltagirone SpA or generate 66.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caltagirone SpA vs. JJ SNACK FOODS
Performance |
| Timeline |
| Caltagirone SpA |
| JJ SNACK FOODS |
Caltagirone SpA and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caltagirone SpA and J+J SNACK
The main advantage of trading using opposite Caltagirone SpA and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caltagirone SpA 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.| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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