Correlation Between Hostess Brands and Simply Good
Can any of the company-specific risk be diversified away by investing in both Hostess Brands 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 Hostess Brands and Simply Good into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hostess Brands and Simply Good Foods, you can compare the effects of market volatilities on Hostess Brands 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 Hostess Brands with a short position of Simply Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hostess Brands and Simply Good.
Diversification Opportunities for Hostess Brands and Simply Good
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hostess and Simply is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hostess Brands 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 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 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 Hostess Brands i.e., Hostess Brands and Simply Good go up and down completely randomly.
Pair Corralation between Hostess Brands and Simply Good
If you would invest 3,384 in Simply Good Foods on August 28, 2024 and sell it today you would earn a total of 600.00 from holding Simply Good Foods or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Hostess Brands vs. Simply Good Foods
Performance |
| Timeline |
| Hostess Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Simply Good Foods |
Hostess Brands and Simply Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hostess Brands and Simply Good
The main advantage of trading using opposite Hostess Brands and Simply Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hostess Brands 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.| Hostess Brands vs. Simply Good Foods | Hostess Brands vs. Treehouse Foods | Hostess Brands vs. Post Holdings | Hostess Brands vs. Nomad Foods |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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