Correlation Between J+J SNACK and VITEC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and VITEC SOFTWARE 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 J+J SNACK and VITEC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJ SNACK FOODS and VITEC SOFTWARE GROUP, you can compare the effects of market volatilities on J+J SNACK and VITEC SOFTWARE 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 J+J SNACK with a short position of VITEC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and VITEC SOFTWARE.
Diversification Opportunities for J+J SNACK and VITEC SOFTWARE
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between J+J and VITEC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and VITEC SOFTWARE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITEC SOFTWARE GROUP and J+J SNACK 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 JJ SNACK FOODS are associated (or correlated) with VITEC SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITEC SOFTWARE GROUP has no effect on the direction of J+J SNACK i.e., J+J SNACK and VITEC SOFTWARE go up and down completely randomly.
Pair Corralation between J+J SNACK and VITEC SOFTWARE
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.4 times more return on investment than VITEC SOFTWARE. However, JJ SNACK FOODS is 2.52 times less risky than VITEC SOFTWARE. It trades about 0.13 of its potential returns per unit of risk. VITEC SOFTWARE GROUP is currently generating about 0.0 per unit of risk. If you would invest 15,093 in JJ SNACK FOODS on September 20, 2024 and sell it today you would earn a total of 1,107 from holding JJ SNACK FOODS or generate 7.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JJ SNACK FOODS vs. VITEC SOFTWARE GROUP
Performance |
Timeline |
JJ SNACK FOODS |
VITEC SOFTWARE GROUP |
J+J SNACK and VITEC SOFTWARE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with J+J SNACK and VITEC SOFTWARE
The main advantage of trading using opposite J+J SNACK and VITEC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, VITEC SOFTWARE 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 VITEC SOFTWARE will offset losses from the drop in VITEC SOFTWARE's long position.J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. SIVERS SEMICONDUCTORS AB | J+J SNACK vs. NorAm Drilling AS | J+J SNACK vs. Norsk Hydro ASA |
VITEC SOFTWARE vs. CSSC Offshore Marine | VITEC SOFTWARE vs. Tsingtao Brewery | VITEC SOFTWARE vs. THAI BEVERAGE | VITEC SOFTWARE vs. JJ SNACK FOODS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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