Correlation Between Beyond Meat and J J

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

By analyzing existing cross correlation between Beyond Meat and J J Snack, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of J J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and J J.

Diversification Opportunities for Beyond Meat and J J

0.11

Correlation Coefficient

Beyond Meat  J J

Average diversification

The 3 months correlation between Beyond and JJSF is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat 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 Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and J J go up and down completely randomly.

Pair Corralation between Beyond Meat and J J

Given the investment horizon of 90 days Beyond Meat is expected to generate 4.36 times more return on investment than J J. However, Beyond Meat is 4.36 times more volatile than J J Snack. It trades about 0.14 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  738.00  in Beyond Meat on February 7, 2024 and sell it today you would earn a total of  85.00  from holding Beyond Meat or generate 11.52% return on investment over 90 days.

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

Beyond Meat  vs.  J J Snack

Beyond Meat

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Meat are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Beyond Meat exhibited solid returns over the last few months and may actually be approaching a breakup point.

J J Snack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J J Snack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, J J is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Beyond Meat and J J

The main advantage of trading using opposite Beyond Meat and J J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.

The idea behind Beyond Meat and J J Snack 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.