Correlation Between John B and Aryzta AG

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both John B and Aryzta AG 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 John B and Aryzta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John B Sanfilippo and Aryzta AG PK, you can compare the effects of market volatilities on John B and Aryzta AG 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 John B with a short position of Aryzta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Aryzta AG.

Diversification Opportunities for John B and Aryzta AG

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between John and Aryzta is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Aryzta AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG PK and John B 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 John B Sanfilippo are associated (or correlated) with Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG PK has no effect on the direction of John B i.e., John B and Aryzta AG go up and down completely randomly.

Pair Corralation between John B and Aryzta AG

Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the Aryzta AG. But the stock apears to be less risky and, when comparing its historical volatility, John B Sanfilippo is 1.03 times less risky than Aryzta AG. The stock trades about -0.15 of its potential returns per unit of risk. The Aryzta AG PK is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Aryzta AG PK on August 24, 2024 and sell it today you would lose (7.00) from holding Aryzta AG PK or give up 7.78% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

John B Sanfilippo  vs.  Aryzta AG PK

 Performance 
       Timeline  
John B Sanfilippo 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Aryzta AG PK 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aryzta AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

John B and Aryzta AG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with John B and Aryzta AG

The main advantage of trading using opposite John B and Aryzta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B position performs unexpectedly, Aryzta AG 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 Aryzta AG will offset losses from the drop in Aryzta AG's long position.
The idea behind John B Sanfilippo and Aryzta AG PK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum