Correlation Between Bon Natural and Tattooed Chef

Can any of the company-specific risk be diversified away by investing in both Bon Natural and Tattooed Chef 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 Bon Natural and Tattooed Chef into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bon Natural Life and Tattooed Chef, you can compare the effects of market volatilities on Bon Natural and Tattooed Chef 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 Bon Natural with a short position of Tattooed Chef. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon Natural and Tattooed Chef.

Diversification Opportunities for Bon Natural and Tattooed Chef

0.0

Correlation Coefficient

Bon Natural  Tattooed Chef

Pay attention - limited upside

The 3 months correlation between Bon and Tattooed is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and Tattooed Chef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tattooed Chef and Bon Natural 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 Bon Natural Life are associated (or correlated) with Tattooed Chef. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tattooed Chef has no effect on the direction of Bon Natural i.e., Bon Natural and Tattooed Chef go up and down completely randomly.

Pair Corralation between Bon Natural and Tattooed Chef

If you would invest (100.00) in Tattooed Chef on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Tattooed Chef or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bon Natural Life  vs.  Tattooed Chef

Bon Natural Life

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bon Natural Life has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Tattooed Chef

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tattooed Chef has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Tattooed Chef is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bon Natural and Tattooed Chef

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

The idea behind Bon Natural Life and Tattooed Chef 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.