Correlation Between Central Garden and Hain Celestial
Can any of the company-specific risk be diversified away by investing in both Central Garden and Hain Celestial 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 Central Garden and Hain Celestial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Garden Pet and The Hain Celestial, you can compare the effects of market volatilities on Central Garden and Hain Celestial 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 Central Garden with a short position of Hain Celestial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Garden and Hain Celestial.
Diversification Opportunities for Central Garden and Hain Celestial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Central and Hain is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Central Garden Pet and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial and Central Garden 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 Central Garden Pet are associated (or correlated) with Hain Celestial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hain Celestial has no effect on the direction of Central Garden i.e., Central Garden and Hain Celestial go up and down completely randomly.
Pair Corralation between Central Garden and Hain Celestial
Assuming the 90 days horizon Central Garden Pet is expected to generate 0.45 times more return on investment than Hain Celestial. However, Central Garden Pet is 2.21 times less risky than Hain Celestial. It trades about 0.12 of its potential returns per unit of risk. The Hain Celestial is currently generating about 0.02 per unit of risk. If you would invest 3,140 in Central Garden Pet on August 31, 2024 and sell it today you would earn a total of 273.00 from holding Central Garden Pet or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Garden Pet vs. The Hain Celestial
Performance |
| Timeline |
| Central Garden Pet |
| Hain Celestial |
Central Garden and Hain Celestial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Garden and Hain Celestial
The main advantage of trading using opposite Central Garden and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Garden position performs unexpectedly, Hain Celestial 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 Hain Celestial will offset losses from the drop in Hain Celestial's long position.| Central Garden vs. Seneca Foods Corp | Central Garden vs. Seneca Foods Corp | Central Garden vs. Natures Sunshine Products | Central Garden vs. J J Snack |
| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good Foods |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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