Correlation Between J J and Hain Celestial
Can any of the company-specific risk be diversified away by investing in both J J and Hain Celestial 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 J J and Hain Celestial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J J Snack and The Hain Celestial, you can compare the effects of market volatilities on J J and Hain Celestial 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 J J with a short position of Hain Celestial. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and Hain Celestial.
Diversification Opportunities for J J and Hain Celestial
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between JJSF and Hain is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial and J J 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 J J Snack are associated (or correlated) with Hain Celestial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hain Celestial has no effect on the direction of J J i.e., J J and Hain Celestial go up and down completely randomly.
Pair Corralation between J J and Hain Celestial
Given the investment horizon of 90 days J J is expected to generate 1.56 times less return on investment than Hain Celestial. But when comparing it to its historical volatility, J J Snack is 2.66 times less risky than Hain Celestial. It trades about 0.06 of its potential returns per unit of risk. The Hain Celestial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 826.00 in The Hain Celestial on August 28, 2024 and sell it today you would earn a total of 32.00 from holding The Hain Celestial or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J J Snack vs. The Hain Celestial
Performance |
| Timeline |
| J J Snack |
| Hain Celestial |
J J and Hain Celestial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J J and Hain Celestial
The main advantage of trading using opposite J J and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J J position performs unexpectedly, Hain Celestial 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 Hain Celestial will offset losses from the drop in Hain Celestial's long position.The idea behind J J Snack and The Hain Celestial 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.| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good Foods |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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