Correlation Between J+J SNACK and Iwatani

Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Iwatani 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 Iwatani 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 Iwatani, you can compare the effects of market volatilities on J+J SNACK and Iwatani 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 Iwatani. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Iwatani.

Diversification Opportunities for J+J SNACK and Iwatani

-0.78

Correlation Coefficient

J+J SNACK  Iwatani

Pay attention - limited upside

The 3 months correlation between J+J and Iwatani is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Iwatani in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iwatani 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 Iwatani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iwatani has no effect on the direction of J+J SNACK i.e., J+J SNACK and Iwatani go up and down completely randomly.

Pair Corralation between J+J SNACK and Iwatani

Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.66 times more return on investment than Iwatani. However, JJ SNACK FOODS is 1.52 times less risky than Iwatani. It trades about 0.08 of its potential returns per unit of risk. Iwatani is currently generating about -0.28 per unit of risk. If you would invest  15,127  in JJ SNACK FOODS on September 28, 2024 and sell it today you would earn a total of  673.00  from holding JJ SNACK FOODS or generate 4.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

JJ SNACK FOODS  vs.  Iwatani

JJ SNACK FOODS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JJ SNACK FOODS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, J+J SNACK is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Iwatani

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iwatani has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with J+J SNACK and Iwatani

The main advantage of trading using opposite J+J SNACK and Iwatani positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Iwatani 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 Iwatani will offset losses from the drop in Iwatani's long position.

The idea behind JJ SNACK FOODS and Iwatani pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.