Correlation Between Hain Celestial and Lancaster Colony

Can any of the company-specific risk be diversified away by investing in both Hain Celestial and Lancaster Colony 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 Hain Celestial and Lancaster Colony into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Hain Celestial and Lancaster Colony, you can compare the effects of market volatilities on Hain Celestial and Lancaster Colony 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 Hain Celestial with a short position of Lancaster Colony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hain Celestial and Lancaster Colony.

Diversification Opportunities for Hain Celestial and Lancaster Colony

0.51

Correlation Coefficient

Hain Celestial  Lancaster Colony

Very weak diversification

The 3 months correlation between Hain and Lancaster is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Hain Celestial and Lancaster Colony in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancaster Colony and Hain Celestial 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 The Hain Celestial are associated (or correlated) with Lancaster Colony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancaster Colony has no effect on the direction of Hain Celestial i.e., Hain Celestial and Lancaster Colony go up and down completely randomly.

Pair Corralation between Hain Celestial and Lancaster Colony

Given the investment horizon of 90 days The Hain Celestial is expected to under-perform the Lancaster Colony. In addition to that, Hain Celestial is 1.91 times more volatile than Lancaster Colony. It trades about -0.08 of its total potential returns per unit of risk. Lancaster Colony is currently generating about 0.0 per unit of volatility. If you would invest  18,340  in Lancaster Colony on October 21, 2024 and sell it today you would lose (1,230) from holding Lancaster Colony or give up 6.71% of portfolio value over 90 days.

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

The Hain Celestial  vs.  Lancaster Colony

Hain Celestial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lancaster Colony

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lancaster Colony has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Lancaster Colony is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hain Celestial and Lancaster Colony

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

The idea behind The Hain Celestial and Lancaster Colony 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.