Correlation Between Herbalife Nutrition and BG Foods
Can any of the company-specific risk be diversified away by investing in both Herbalife Nutrition and BG 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 Herbalife Nutrition and BG Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herbalife Nutrition and BG Foods, you can compare the effects of market volatilities on Herbalife Nutrition and BG 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 Herbalife Nutrition with a short position of BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herbalife Nutrition and BG Foods.
Diversification Opportunities for Herbalife Nutrition and BG Foods
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Herbalife and BGS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Herbalife Nutrition and BG Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods and Herbalife Nutrition 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 Herbalife Nutrition are associated (or correlated) with BG Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Foods has no effect on the direction of Herbalife Nutrition i.e., Herbalife Nutrition and BG Foods go up and down completely randomly.
Pair Corralation between Herbalife Nutrition and BG Foods
Considering the 90-day investment horizon Herbalife Nutrition is expected to generate 1.22 times more return on investment than BG Foods. However, Herbalife Nutrition is 1.22 times more volatile than BG Foods. It trades about -0.06 of its potential returns per unit of risk. BG Foods is currently generating about -0.07 per unit of risk. If you would invest 1,086 in Herbalife Nutrition on September 2, 2024 and sell it today you would lose (309.00) from holding Herbalife Nutrition or give up 28.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herbalife Nutrition vs. BG Foods
Performance |
| Timeline |
| Herbalife Nutrition |
| BG Foods |
Herbalife Nutrition and BG Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herbalife Nutrition and BG Foods
The main advantage of trading using opposite Herbalife Nutrition and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herbalife Nutrition position performs unexpectedly, BG 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 BG Foods will offset losses from the drop in BG Foods' long position.| Herbalife Nutrition vs. Nomad Foods | Herbalife Nutrition vs. Bellring Brands LLC | Herbalife Nutrition vs. Pilgrims Pride Corp | Herbalife Nutrition vs. Ingredion Incorporated |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |