Correlation Between C86068AA8 and John B

Can any of the company-specific risk be diversified away by investing in both C86068AA8 and John B 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 C86068AA8 and John B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between USC86068AA80 and John B Sanfilippo, you can compare the effects of market volatilities on C86068AA8 and John B 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 C86068AA8 with a short position of John B. Check out your portfolio center. Please also check ongoing floating volatility patterns of C86068AA8 and John B.

Diversification Opportunities for C86068AA8 and John B

-0.11

Correlation Coefficient

C86068AA8  John B

Good diversification

The 3 months correlation between C86068AA8 and John is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding USC86068AA80 and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo and C86068AA8 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 USC86068AA80 are associated (or correlated) with John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of C86068AA8 i.e., C86068AA8 and John B go up and down completely randomly.

Pair Corralation between C86068AA8 and John B

Assuming the 90 days trading horizon USC86068AA80 is expected to generate 0.57 times more return on investment than John B. However, USC86068AA80 is 1.74 times less risky than John B. It trades about 0.01 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.27 per unit of risk. If you would invest  10,052  in USC86068AA80 on January 24, 2024 and sell it today you would earn a total of  3.00  from holding USC86068AA80 or generate 0.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

USC86068AA80  vs.  John B Sanfilippo

USC86068AA80

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days USC86068AA80 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, C86068AA8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John B Sanfilippo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, John B 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 C86068AA8 and John B

The main advantage of trading using opposite C86068AA8 and John B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C86068AA8 position performs unexpectedly, John B 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 John B will offset losses from the drop in John B's long position.

The idea behind USC86068AA80 and John B Sanfilippo 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.