Correlation Between Natures Sunshine and Simply Good
Can any of the company-specific risk be diversified away by investing in both Natures Sunshine and Simply Good 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 Natures Sunshine and Simply Good into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natures Sunshine Products and Simply Good Foods, you can compare the effects of market volatilities on Natures Sunshine and Simply Good 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 Natures Sunshine with a short position of Simply Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natures Sunshine and Simply Good.
Diversification Opportunities for Natures Sunshine and Simply Good
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Natures and Simply is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products and Simply Good Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simply Good Foods and Natures Sunshine 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 Natures Sunshine Products are associated (or correlated) with Simply Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simply Good Foods has no effect on the direction of Natures Sunshine i.e., Natures Sunshine and Simply Good go up and down completely randomly.
Pair Corralation between Natures Sunshine and Simply Good
Given the investment horizon of 90 days Natures Sunshine Products is expected to generate 2.21 times more return on investment than Simply Good. However, Natures Sunshine is 2.21 times more volatile than Simply Good Foods. It trades about 0.03 of its potential returns per unit of risk. Simply Good Foods is currently generating about 0.04 per unit of risk. If you would invest 1,507 in Natures Sunshine Products on August 30, 2024 and sell it today you would earn a total of 108.00 from holding Natures Sunshine Products or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natures Sunshine Products vs. Simply Good Foods
Performance |
| Timeline |
| Natures Sunshine Products |
| Simply Good Foods |
Natures Sunshine and Simply Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natures Sunshine and Simply Good
The main advantage of trading using opposite Natures Sunshine and Simply Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natures Sunshine position performs unexpectedly, Simply Good 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 Simply Good will offset losses from the drop in Simply Good's long position.| Natures Sunshine vs. ELF Beauty | Natures Sunshine vs. Procter Gamble | Natures Sunshine vs. Colgate Palmolive | Natures Sunshine vs. Kenvue Inc |
| Simply Good vs. Post Holdings | Simply Good vs. Treehouse Foods | Simply Good vs. J J Snack | Simply Good vs. Central Garden Pet |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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