Correlation Between J+J SNACK and PT Bank
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and PT Bank 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 PT Bank 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 PT Bank Central, you can compare the effects of market volatilities on J+J SNACK and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and PT Bank.
Diversification Opportunities for J+J SNACK and PT Bank
Very good diversification
The 3 months correlation between J+J and BZG2 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of J+J SNACK i.e., J+J SNACK and PT Bank go up and down completely randomly.
Pair Corralation between J+J SNACK and PT Bank
Assuming the 90 days trading horizon J+J SNACK is expected to generate 2.28 times less return on investment than PT Bank. But when comparing it to its historical volatility, JJ SNACK FOODS is 2.78 times less risky than PT Bank. It trades about 0.03 of its potential returns per unit of risk. PT Bank Central is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 50.00 in PT Bank Central on September 24, 2024 and sell it today you would earn a total of 8.00 from holding PT Bank Central or generate 16.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JJ SNACK FOODS vs. PT Bank Central
Performance |
Timeline |
JJ SNACK FOODS |
PT Bank Central |
J+J SNACK and PT Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with J+J SNACK and PT Bank
The main advantage of trading using opposite J+J SNACK and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.J+J SNACK vs. Mowi ASA | J+J SNACK vs. LEROY SEAFOOD GRUNSPADR | J+J SNACK vs. Lery Seafood Group | J+J SNACK vs. Nisshin Seifun Group |
PT Bank vs. Hochschild Mining plc | PT Bank vs. PLAYMATES TOYS | PT Bank vs. Astral Foods Limited | PT Bank 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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