Correlation Between Western Copper and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both Western Copper 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 Western Copper 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 Western Copper and and JJ SNACK FOODS, you can compare the effects of market volatilities on Western Copper 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 Western Copper with a short position of J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and J+J SNACK.
Diversification Opportunities for Western Copper and J+J SNACK
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and J+J is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and 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 Western Copper 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 Western Copper and 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 Western Copper i.e., Western Copper and J+J SNACK go up and down completely randomly.
Pair Corralation between Western Copper and J+J SNACK
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the J+J SNACK. In addition to that, Western Copper is 2.99 times more volatile than JJ SNACK FOODS. It trades about -0.24 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 15,923 in JJ SNACK FOODS on September 25, 2024 and sell it today you would lose (123.00) from holding JJ SNACK FOODS or give up 0.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Western Copper and vs. JJ SNACK FOODS
Performance |
Timeline |
Western Copper |
JJ SNACK FOODS |
Western Copper and J+J SNACK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Copper and J+J SNACK
The main advantage of trading using opposite Western Copper and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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.Western Copper vs. COSMOSTEEL HLDGS | Western Copper vs. MITSUBISHI STEEL MFG | Western Copper vs. Gaztransport Technigaz SA | Western Copper vs. NIPPON STEEL SPADR |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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