Correlation Between Flowers Foods and J J

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

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

Diversification Opportunities for Flowers Foods and J J

0.41

Correlation Coefficient

Flowers Foods  J J

Very weak diversification

The 3 months correlation between Flowers and JJSF is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods 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 Flowers Foods 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 Flowers Foods 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 Flowers Foods i.e., Flowers Foods and J J go up and down completely randomly.

Pair Corralation between Flowers Foods and J J

Considering the 90-day investment horizon Flowers Foods is expected to generate 0.67 times more return on investment than J J. However, Flowers Foods is 1.49 times less risky than J J. It trades about -0.08 of its potential returns per unit of risk. J J Snack is currently generating about -0.09 per unit of risk. If you would invest  1,718  in Flowers Foods on May 5, 2025 and sell it today you would lose (134.00) from holding Flowers Foods or give up 7.8% of portfolio value over 90 days.

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

Flowers Foods  vs.  J J Snack

Flowers Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flowers Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

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 Flowers Foods and J J

The main advantage of trading using opposite Flowers Foods and J J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods 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 Flowers Foods 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.