Correlation Between Benson Hill, and Scotts Miracle

Can any of the company-specific risk be diversified away by investing in both Benson Hill, and Scotts Miracle 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 Benson Hill, and Scotts Miracle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Benson Hill, Common and Scotts Miracle Gro, you can compare the effects of market volatilities on Benson Hill, and Scotts Miracle 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 Benson Hill, with a short position of Scotts Miracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benson Hill, and Scotts Miracle.

Diversification Opportunities for Benson Hill, and Scotts Miracle

0.3

Correlation Coefficient

Benson Hill,  Scotts Miracle

Weak diversification

The 3 months correlation between Benson and Scotts is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Benson Hill, Common and Scotts Miracle Gro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scotts Miracle Gro and Benson Hill, 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 Benson Hill, Common are associated (or correlated) with Scotts Miracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scotts Miracle Gro has no effect on the direction of Benson Hill, i.e., Benson Hill, and Scotts Miracle go up and down completely randomly.

Pair Corralation between Benson Hill, and Scotts Miracle

Given the investment horizon of 90 days Benson Hill, Common is expected to under-perform the Scotts Miracle. In addition to that, Benson Hill, is 1.14 times more volatile than Scotts Miracle Gro. It trades about -0.16 of its total potential returns per unit of risk. Scotts Miracle Gro is currently generating about 0.06 per unit of volatility. If you would invest  6,993  in Scotts Miracle Gro on September 3, 2024 and sell it today you would earn a total of  716.00  from holding Scotts Miracle Gro or generate 10.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Benson Hill, Common  vs.  Scotts Miracle Gro

Benson Hill, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Benson Hill, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Scotts Miracle Gro

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Scotts Miracle Gro are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Scotts Miracle reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Benson Hill, and Scotts Miracle

The main advantage of trading using opposite Benson Hill, and Scotts Miracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benson Hill, position performs unexpectedly, Scotts Miracle 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 Scotts Miracle will offset losses from the drop in Scotts Miracle's long position.

The idea behind Benson Hill, Common and Scotts Miracle Gro 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.