Correlation Between J J and First Bancorp

Can any of the company-specific risk be diversified away by investing in both J J and First Bancorp 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 First Bancorp 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 First Bancorp, you can compare the effects of market volatilities on J J and First Bancorp 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 First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and First Bancorp.

Diversification Opportunities for J J and First Bancorp

-0.17

Correlation Coefficient

J J  First Bancorp

Good diversification

The 3 months correlation between JJSF and First is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp 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 First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of J J i.e., J J and First Bancorp go up and down completely randomly.

Pair Corralation between J J and First Bancorp

Given the investment horizon of 90 days J J Snack is expected to under-perform the First Bancorp. In addition to that, J J is 1.5 times more volatile than First Bancorp. It trades about -0.04 of its total potential returns per unit of risk. First Bancorp is currently generating about 0.24 per unit of volatility. If you would invest  4,023  in First Bancorp on April 28, 2025 and sell it today you would earn a total of  990.00  from holding First Bancorp or generate 24.61% return on investment over 90 days.

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

J J Snack  vs.  First Bancorp

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 nearly stable basic indicators, J J is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

First Bancorp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Bancorp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, First Bancorp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with J J and First Bancorp

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

The idea behind J J Snack and First Bancorp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.