Correlation Between Lancaster Colony and J J
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and J J 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 Lancaster Colony and J J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and J J Snack, you can compare the effects of market volatilities on Lancaster Colony and J J 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 Lancaster Colony with a short position of J J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and J J.
Diversification Opportunities for Lancaster Colony and J J
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lancaster and JJSF is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and J J Snack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J J Snack and Lancaster Colony 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 Lancaster Colony are associated (or correlated) with J J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J J Snack has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and J J go up and down completely randomly.
Pair Corralation between Lancaster Colony and J J
Given the investment horizon of 90 days Lancaster Colony is expected to generate 0.57 times more return on investment than J J. However, Lancaster Colony is 1.77 times less risky than J J. It trades about 0.15 of its potential returns per unit of risk. J J Snack is currently generating about -0.05 per unit of risk. If you would invest 15,970 in Lancaster Colony on May 1, 2025 and sell it today you would earn a total of 1,307 from holding Lancaster Colony or generate 8.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.74% |
| Values | Daily Returns |
Lancaster Colony vs. J J Snack
Performance |
| Timeline |
| Lancaster Colony |
Risk-Adjusted Performance
Good
Weak | Strong |
| J J Snack |
Lancaster Colony and J J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and J J
The main advantage of trading using opposite Lancaster Colony and J J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, J J 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 will offset losses from the drop in J J's long position.| Lancaster Colony vs. Treehouse Foods | Lancaster Colony vs. John B Sanfilippo | Lancaster Colony vs. Seneca Foods Corp | Lancaster Colony vs. J J Snack |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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