Correlation Between Hain Celestial and McCormick Company
Can any of the company-specific risk be diversified away by investing in both Hain Celestial and McCormick Company 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 Hain Celestial and McCormick Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hain Celestial and McCormick Company Incorporated, you can compare the effects of market volatilities on Hain Celestial and McCormick Company 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 Hain Celestial with a short position of McCormick Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hain Celestial and McCormick Company.
Diversification Opportunities for Hain Celestial and McCormick Company
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hain and McCormick is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Hain Celestial and McCormick Company Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McCormick Company and Hain Celestial 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 The Hain Celestial are associated (or correlated) with McCormick Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McCormick Company has no effect on the direction of Hain Celestial i.e., Hain Celestial and McCormick Company go up and down completely randomly.
Pair Corralation between Hain Celestial and McCormick Company
Given the investment horizon of 90 days The Hain Celestial is expected to generate 3.12 times more return on investment than McCormick Company. However, Hain Celestial is 3.12 times more volatile than McCormick Company Incorporated. It trades about 0.04 of its potential returns per unit of risk. McCormick Company Incorporated is currently generating about 0.07 per unit of risk. If you would invest 779.00 in The Hain Celestial on August 30, 2024 and sell it today you would earn a total of 84.00 from holding The Hain Celestial or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hain Celestial vs. McCormick Company Incorporated
Performance |
| Timeline |
| Hain Celestial |
| McCormick Company |
Hain Celestial and McCormick Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hain Celestial and McCormick Company
The main advantage of trading using opposite Hain Celestial and McCormick Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hain Celestial position performs unexpectedly, McCormick Company 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 McCormick Company will offset losses from the drop in McCormick Company's long position.| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good Foods |
| McCormick Company vs. ConAgra Foods | McCormick Company vs. Campbell Soup | McCormick Company vs. Kellanova | McCormick Company 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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