Correlation Between JJ SNACK and PPHE HOTEL

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

Diversification Opportunities for JJ SNACK and PPHE HOTEL

-0.11

Correlation Coefficient

JJ SNACK  PPHE HOTEL

Good diversification

The 3 months correlation between JJ1 and PPHE is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and JJ 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 PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of JJ SNACK i.e., JJ SNACK and PPHE HOTEL go up and down completely randomly.

Pair Corralation between JJ SNACK and PPHE HOTEL

Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the PPHE HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, JJ SNACK FOODS is 1.0 times less risky than PPHE HOTEL. The stock trades about -0.07 of its potential returns per unit of risk. The PPHE HOTEL GROUP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,453  in PPHE HOTEL GROUP on December 10, 2024 and sell it today you would earn a total of  97.00  from holding PPHE HOTEL GROUP or generate 6.68% 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.  PPHE HOTEL GROUP

JJ SNACK FOODS

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

PPHE HOTEL GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days PPHE HOTEL GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PPHE HOTEL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JJ SNACK and PPHE HOTEL

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

The idea behind JJ SNACK FOODS and PPHE HOTEL GROUP 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.