Correlation Between J J and Andersons

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

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

Diversification Opportunities for J J and Andersons

0.53

Correlation Coefficient

J J  Andersons

Very weak diversification

The 3 months correlation between JJSF and Andersons is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and The Andersons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andersons and J J 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 J J Snack are associated (or correlated) with Andersons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andersons has no effect on the direction of J J i.e., J J and Andersons go up and down completely randomly.

Pair Corralation between J J and Andersons

Given the investment horizon of 90 days J J Snack is expected to under-perform the Andersons. But the stock apears to be less risky and, when comparing its historical volatility, J J Snack is 1.1 times less risky than Andersons. The stock trades about -0.06 of its potential returns per unit of risk. The The Andersons is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,784  in The Andersons on April 29, 2025 and sell it today you would lose (174.00) from holding The Andersons or give up 4.6% of portfolio value over 90 days.

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

J J Snack  vs.  The Andersons

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.

Andersons

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Andersons has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Andersons is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with J J and Andersons

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

The idea behind J J Snack and The Andersons 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..