Correlation Between J J and Federal Home

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

Diversification Opportunities for J J and Federal Home

0.28

Correlation Coefficient

J J  Federal Home

Modest diversification

The 3 months correlation between JJSF and Federal is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan 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 Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home Loan has no effect on the direction of J J i.e., J J and Federal Home go up and down completely randomly.

Pair Corralation between J J and Federal Home

Given the investment horizon of 90 days J J Snack is expected to under-perform the Federal Home. But the stock apears to be less risky and, when comparing its historical volatility, J J Snack is 1.03 times less risky than Federal Home. The stock trades about -0.13 of its potential returns per unit of risk. The Federal Home Loan is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,424  in Federal Home Loan on September 4, 2025 and sell it today you would lose (140.00) from holding Federal Home Loan or give up 9.83% of portfolio value over 90 days.

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

J J Snack  vs.  Federal Home Loan

J J Snack

Risk-Adjusted Performance

Weakest

Over the last 90 days J J Snack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Federal Home Loan

Risk-Adjusted Performance

Weakest

Over the last 90 days Federal Home Loan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with J J and Federal Home

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

The idea behind J J Snack and Federal Home Loan 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.