Correlation Between Delta Electronics and J+J SNACK

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

Diversification Opportunities for Delta Electronics and J+J SNACK

0.68

Correlation Coefficient

Delta Electronics  J+J SNACK

Poor diversification

The 3 months correlation between Delta and J+J is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public 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 Delta Electronics 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 Delta Electronics Public 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 Delta Electronics i.e., Delta Electronics and J+J SNACK go up and down completely randomly.

Pair Corralation between Delta Electronics and J+J SNACK

Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 3.49 times more return on investment than J+J SNACK. However, Delta Electronics is 3.49 times more volatile than JJ SNACK FOODS. It trades about 0.16 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about -0.02 per unit of risk. If you would invest  286.00  in Delta Electronics Public on October 8, 2024 and sell it today you would earn a total of  102.00  from holding Delta Electronics Public or generate 35.66% return on investment over 90 days.

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

Delta Electronics Public  vs.  JJ SNACK FOODS

Delta Electronics Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Electronics Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Delta Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

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 Delta Electronics and J+J SNACK

The main advantage of trading using opposite Delta Electronics and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics 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 Delta Electronics Public 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.