Correlation Between Dennys Corp and J J

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

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

Diversification Opportunities for Dennys Corp and J J

-0.63

Correlation Coefficient

Dennys Corp  J J

Excellent diversification

The 3 months correlation between Dennys and JJSF is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp 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 Dennys Corp 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 Dennys Corp 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 Dennys Corp i.e., Dennys Corp and J J go up and down completely randomly.

Pair Corralation between Dennys Corp and J J

Given the investment horizon of 90 days Dennys Corp is expected to generate 1.67 times more return on investment than J J. However, Dennys Corp is 1.67 times more volatile than J J Snack. It trades about 0.13 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  358.00  in Dennys Corp on April 25, 2025 and sell it today you would earn a total of  106.00  from holding Dennys Corp or generate 29.61% return on investment over 90 days.

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

Dennys Corp  vs.  J J Snack

Dennys Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dennys Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dennys Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

J J Snack

Risk-Adjusted Performance

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 latest abnormal 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.

Pair Trading with Dennys Corp and J J

The main advantage of trading using opposite Dennys Corp and J J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dennys Corp 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 Dennys Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.