Correlation Between Lundin Mining and J+J SNACK

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

Diversification Opportunities for Lundin Mining and J+J SNACK

-0.24

Correlation Coefficient

Lundin Mining  J+J SNACK

Very good diversification

The 3 months correlation between Lundin and J+J is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining 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 Lundin Mining 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 Lundin Mining 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 Lundin Mining i.e., Lundin Mining and J+J SNACK go up and down completely randomly.

Pair Corralation between Lundin Mining and J+J SNACK

Assuming the 90 days horizon Lundin Mining is expected to under-perform the J+J SNACK. In addition to that, Lundin Mining is 2.57 times more volatile than JJ SNACK FOODS. It trades about -0.22 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about -0.37 per unit of volatility. If you would invest  16,222  in JJ SNACK FOODS on October 3, 2024 and sell it today you would lose (1,022) from holding JJ SNACK FOODS or give up 6.3% of portfolio value over 90 days.

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

Lundin Mining  vs.  JJ SNACK FOODS

Lundin Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

JJ SNACK FOODS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JJ SNACK FOODS has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Lundin Mining and J+J SNACK

The main advantage of trading using opposite Lundin Mining and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining 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.

The idea behind Lundin Mining and JJ SNACK FOODS 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..