Correlation Between Public Storage and J+J SNACK

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

Diversification Opportunities for Public Storage and J+J SNACK

0.64

Correlation Coefficient

Public Storage  J+J SNACK

Poor diversification

The 3 months correlation between Public and J+J is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage 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 Public Storage 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 Public Storage 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 Public Storage i.e., Public Storage and J+J SNACK go up and down completely randomly.

Pair Corralation between Public Storage and J+J SNACK

Assuming the 90 days horizon Public Storage is expected to under-perform the J+J SNACK. In addition to that, Public Storage is 1.59 times more volatile than JJ SNACK FOODS. It trades about -0.1 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about -0.12 per unit of volatility. If you would invest  15,525  in JJ SNACK FOODS on October 21, 2024 and sell it today you would lose (1,225) from holding JJ SNACK FOODS or give up 7.89% of portfolio value over 90 days.

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

Public Storage  vs.  JJ SNACK FOODS

Public Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Public Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Public Storage and J+J SNACK

The main advantage of trading using opposite Public Storage and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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 Public Storage 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.