Correlation Between Glanbia Plc and J J

Can any of the company-specific risk be diversified away by investing in both Glanbia Plc and J J 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 Glanbia Plc and J J into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Glanbia plc and J J Snack, you can compare the effects of market volatilities on Glanbia Plc and J J 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 Glanbia Plc with a short position of J J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glanbia Plc and J J.

Diversification Opportunities for Glanbia Plc and J J

-0.08

Correlation Coefficient

Glanbia Plc  J J

Good diversification

The 3 months correlation between Glanbia and JJSF is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Glanbia plc and J J Snack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J J Snack and Glanbia Plc 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 Glanbia plc are associated (or correlated) with J J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J J Snack has no effect on the direction of Glanbia Plc i.e., Glanbia Plc and J J go up and down completely randomly.

Pair Corralation between Glanbia Plc and J J

Assuming the 90 days horizon Glanbia plc is expected to generate 1.05 times more return on investment than J J. However, Glanbia Plc is 1.05 times more volatile than J J Snack. It trades about 0.03 of its potential returns per unit of risk. J J Snack is currently generating about 0.02 per unit of risk. If you would invest  1,274  in Glanbia plc on September 21, 2024 and sell it today you would earn a total of  206.00  from holding Glanbia plc or generate 16.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.52%
Values	Daily Returns

Glanbia plc  vs.  J J Snack

Glanbia plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glanbia plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

J J Snack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J J Snack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, J J is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Glanbia Plc and J J

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

The idea behind Glanbia plc and J J Snack 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.