Correlation Between J+J SNACK and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both J+J SNACK and Martin Marietta 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 Martin Marietta 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 Martin Marietta Materials, you can compare the effects of market volatilities on J+J SNACK and Martin Marietta 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 Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Martin Marietta.
Diversification Opportunities for J+J SNACK and Martin Marietta
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between J+J and Martin is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Martin Marietta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Materials 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 Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Materials has no effect on the direction of J+J SNACK i.e., J+J SNACK and Martin Marietta go up and down completely randomly.
Pair Corralation between J+J SNACK and Martin Marietta
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to generate 0.67 times more return on investment than Martin Marietta. However, JJ SNACK FOODS is 1.5 times less risky than Martin Marietta. It trades about -0.06 of its potential returns per unit of risk. Martin Marietta Materials is currently generating about -0.63 per unit of risk. If you would invest 15,923 in JJ SNACK FOODS on September 26, 2024 and sell it today you would lose (123.00) from holding JJ SNACK FOODS or give up 0.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
JJ SNACK FOODS vs. Martin Marietta Materials
Performance |
Timeline |
JJ SNACK FOODS |
Martin Marietta Materials |
J+J SNACK and Martin Marietta Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with J+J SNACK and Martin Marietta
The main advantage of trading using opposite J+J SNACK and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK position performs unexpectedly, Martin Marietta 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 Martin Marietta will offset losses from the drop in Martin Marietta's long position.J+J SNACK vs. H FARM SPA | J+J SNACK vs. Hitachi Construction Machinery | J+J SNACK vs. Australian Agricultural | J+J SNACK vs. MEDICAL FACILITIES NEW |
Martin Marietta vs. Dalata Hotel Group | Martin Marietta vs. UNITED UTILITIES GR | Martin Marietta vs. Harmony Gold Mining | Martin Marietta vs. GRIFFIN MINING LTD |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |