Correlation Between MARKET VECTR and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both MARKET VECTR 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 MARKET VECTR 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 MARKET VECTR RETAIL and JJ SNACK FOODS, you can compare the effects of market volatilities on MARKET VECTR 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 MARKET VECTR with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and J+J SNACK.
Diversification Opportunities for MARKET VECTR and J+J SNACK
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MARKET and J+J is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL 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 MARKET VECTR 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 MARKET VECTR RETAIL 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 MARKET VECTR i.e., MARKET VECTR and J+J SNACK go up and down completely randomly.
Pair Corralation between MARKET VECTR and J+J SNACK
Assuming the 90 days trading horizon MARKET VECTR RETAIL is expected to generate 0.55 times more return on investment than J+J SNACK. However, MARKET VECTR RETAIL is 1.82 times less risky than J+J SNACK. It trades about 0.16 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 16,198 in MARKET VECTR RETAIL on September 14, 2024 and sell it today you would earn a total of 6,417 from holding MARKET VECTR RETAIL or generate 39.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.9% |
| Values | Daily Returns |
MARKET VECTR RETAIL vs. JJ SNACK FOODS
Performance |
| Timeline |
| MARKET VECTR RETAIL |
| JJ SNACK FOODS |
MARKET VECTR and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MARKET VECTR and J+J SNACK
The main advantage of trading using opposite MARKET VECTR and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARKET VECTR 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.| MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Apple Inc |
| J+J SNACK vs. Hormel Foods | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. SIVERS SEMICONDUCTORS AB | J+J SNACK vs. NorAm Drilling AS |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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