Correlation Between Bon Natural and Stryve Foods
Can any of the company-specific risk be diversified away by investing in both Bon Natural and Stryve Foods 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 Stryve Foods 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 Stryve Foods, you can compare the effects of market volatilities on Bon Natural and Stryve Foods 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 Stryve Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon Natural and Stryve Foods.
Diversification Opportunities for Bon Natural and Stryve Foods
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bon and Stryve is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and Stryve Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryve Foods 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 Stryve Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryve Foods has no effect on the direction of Bon Natural i.e., Bon Natural and Stryve Foods go up and down completely randomly.
Pair Corralation between Bon Natural and Stryve Foods
Considering the 90-day investment horizon Bon Natural Life is expected to generate 0.89 times more return on investment than Stryve Foods. However, Bon Natural Life is 1.13 times less risky than Stryve Foods. It trades about 0.17 of its potential returns per unit of risk. Stryve Foods is currently generating about 0.02 per unit of risk. If you would invest 147.00 in Bon Natural Life on August 27, 2024 and sell it today you would earn a total of 22.00 from holding Bon Natural Life or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bon Natural Life vs. Stryve Foods
Performance |
| Timeline |
| Bon Natural Life |
| Stryve Foods |
Bon Natural and Stryve Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bon Natural and Stryve Foods
The main advantage of trading using opposite Bon Natural and Stryve Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bon Natural position performs unexpectedly, Stryve Foods 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 Stryve Foods will offset losses from the drop in Stryve Foods' long position.| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
| Stryve Foods vs. Bit Origin | Stryve Foods vs. Laird Superfood | Stryve Foods vs. Planet Green Holdings | Stryve Foods vs. Better Choice |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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