Correlation Between Bon Natural and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Bon Natural and Beyond Meat 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 Bon Natural and Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bon Natural Life and Beyond Meat, you can compare the effects of market volatilities on Bon Natural and Beyond Meat 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 Bon Natural with a short position of Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon Natural and Beyond Meat.
Diversification Opportunities for Bon Natural and Beyond Meat
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bon and Beyond is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat and Bon Natural 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 Bon Natural Life are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Bon Natural i.e., Bon Natural and Beyond Meat go up and down completely randomly.
Pair Corralation between Bon Natural and Beyond Meat
Considering the 90-day investment horizon Bon Natural Life is expected to under-perform the Beyond Meat. In addition to that, Bon Natural is 1.12 times more volatile than Beyond Meat. It trades about -0.34 of its total potential returns per unit of risk. Beyond Meat is currently generating about 0.1 per unit of volatility. If you would invest 385.00 in Beyond Meat on November 2, 2024 and sell it today you would earn a total of 22.00 from holding Beyond Meat or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bon Natural Life vs. Beyond Meat
Performance |
| Timeline |
| Bon Natural Life |
| Beyond Meat |
Bon Natural and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bon Natural and Beyond Meat
The main advantage of trading using opposite Bon Natural and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bon Natural position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| Bon Natural vs. Grand Havana | Bon Natural vs. Central Garden Pet | Bon Natural vs. Natures Sunshine Products | Bon Natural vs. Central Garden Pet |
| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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