Correlation Between J+J SNACK and Vishay Intertechnology

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

Diversification Opportunities for J+J SNACK and Vishay Intertechnology

-0.01

Correlation Coefficient

J+J SNACK  Vishay Intertechnology

Good diversification

The 3 months correlation between J+J and Vishay is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of J+J SNACK i.e., J+J SNACK and Vishay Intertechnology go up and down completely randomly.

Pair Corralation between J+J SNACK and Vishay Intertechnology

Assuming the 90 days trading horizon J+J SNACK is expected to generate 1.76 times less return on investment than Vishay Intertechnology. But when comparing it to its historical volatility, JJ SNACK FOODS is 2.67 times less risky than Vishay Intertechnology. It trades about 0.1 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,666  in Vishay Intertechnology on September 5, 2024 and sell it today you would earn a total of  164.00  from holding Vishay Intertechnology or generate 9.84% 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.  Vishay Intertechnology

JJ SNACK FOODS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JJ SNACK FOODS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, J+J SNACK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vishay Intertechnology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Vishay Intertechnology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with J+J SNACK and Vishay Intertechnology

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

The idea behind JJ SNACK FOODS and Vishay Intertechnology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.