Correlation Between Central Garden and Utz Brands
Can any of the company-specific risk be diversified away by investing in both Central Garden and Utz Brands 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 Utz Brands 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 Utz Brands, you can compare the effects of market volatilities on Central Garden and Utz Brands 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 Utz Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Garden and Utz Brands.
Diversification Opportunities for Central Garden and Utz Brands
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Central and Utz is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Central Garden Pet and Utz Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utz Brands 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 Utz Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utz Brands has no effect on the direction of Central Garden i.e., Central Garden and Utz Brands go up and down completely randomly.
Pair Corralation between Central Garden and Utz Brands
Assuming the 90 days horizon Central Garden Pet is expected to generate 0.57 times more return on investment than Utz Brands. However, Central Garden Pet is 1.74 times less risky than Utz Brands. It trades about 0.47 of its potential returns per unit of risk. Utz Brands is currently generating about 0.1 per unit of risk. If you would invest 2,931 in Central Garden Pet on August 31, 2024 and sell it today you would earn a total of 482.00 from holding Central Garden Pet or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Garden Pet vs. Utz Brands
Performance |
| Timeline |
| Central Garden Pet |
| Utz Brands |
Central Garden and Utz Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Garden and Utz Brands
The main advantage of trading using opposite Central Garden and Utz Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Garden position performs unexpectedly, Utz Brands 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 Utz Brands will offset losses from the drop in Utz Brands' 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 |
| Utz Brands vs. Post Holdings | Utz Brands vs. J J Snack | Utz Brands vs. The Hain Celestial | Utz Brands vs. Bellring Brands LLC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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