Correlation Between Hostess Brands and John B
Can any of the company-specific risk be diversified away by investing in both Hostess Brands and John B 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 Hostess Brands and John B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hostess Brands and John B Sanfilippo, you can compare the effects of market volatilities on Hostess Brands and John B 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 Hostess Brands with a short position of John B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hostess Brands and John B.
Diversification Opportunities for Hostess Brands and John B
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hostess and John is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hostess Brands and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo and Hostess Brands 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 Hostess Brands are associated (or correlated) with John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Hostess Brands i.e., Hostess Brands and John B go up and down completely randomly.
Pair Corralation between Hostess Brands and John B
If you would invest 2,440 in Hostess Brands on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Hostess Brands or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Hostess Brands vs. John B Sanfilippo
Performance |
| Timeline |
| Hostess Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| John B Sanfilippo |
Hostess Brands and John B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hostess Brands and John B
The main advantage of trading using opposite Hostess Brands and John B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hostess Brands position performs unexpectedly, John B 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 John B will offset losses from the drop in John B's long position.| Hostess Brands vs. Simply Good Foods | Hostess Brands vs. Treehouse Foods | Hostess Brands vs. Post Holdings | Hostess Brands vs. Nomad Foods |
| John B vs. Bellring Brands LLC | John B vs. Ingredion Incorporated | John B vs. Nomad Foods | John B 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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