Correlation Between John B and Utz Brands
Can any of the company-specific risk be diversified away by investing in both John B 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 John B and Utz Brands 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 Utz Brands, you can compare the effects of market volatilities on John B 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 John B with a short position of Utz Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Utz Brands.
Diversification Opportunities for John B and Utz Brands
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Utz is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Utz Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utz Brands 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 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 John B i.e., John B and Utz Brands go up and down completely randomly.
Pair Corralation between John B and Utz Brands
Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the Utz Brands. But the stock apears to be less risky and, when comparing its historical volatility, John B Sanfilippo is 1.23 times less risky than Utz Brands. The stock trades about -0.01 of its potential returns per unit of risk. The Utz Brands is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,578 in Utz Brands on November 2, 2024 and sell it today you would lose (247.50) from holding Utz Brands or give up 15.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John B Sanfilippo vs. Utz Brands
Performance |
| Timeline |
| John B Sanfilippo |
| Utz Brands |
John B and Utz Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and Utz Brands
The main advantage of trading using opposite John B and Utz Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B 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.| John B vs. Lancaster Colony | John B vs. Treehouse Foods | John B vs. Seneca Foods Corp | John B 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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