Correlation Between Hain Celestial and Simply Good

Can any of the company-specific risk be diversified away by investing in both Hain Celestial 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 Hain Celestial and Simply Good 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 Simply Good Foods, you can compare the effects of market volatilities on Hain Celestial 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 Hain Celestial with a short position of Simply Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hain Celestial and Simply Good.

Diversification Opportunities for Hain Celestial and Simply Good

0.68

Correlation Coefficient

Hain Celestial  Simply Good

Poor diversification

The 3 months correlation between Hain and Simply is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Hain Celestial 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 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 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 Hain Celestial i.e., Hain Celestial and Simply Good go up and down completely randomly.

Pair Corralation between Hain Celestial and Simply Good

Given the investment horizon of 90 days The Hain Celestial is expected to under-perform the Simply Good. In addition to that, Hain Celestial is 1.88 times more volatile than Simply Good Foods. It trades about -0.08 of its total potential returns per unit of risk. Simply Good Foods is currently generating about 0.01 per unit of volatility. If you would invest  3,591  in Simply Good Foods on December 1, 2024 and sell it today you would earn a total of  184.00  from holding Simply Good Foods or generate 5.12% return on investment over 90 days.

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

The Hain Celestial  vs.  Simply Good Foods

Hain Celestial

Risk-Adjusted Performance

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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Simply Good Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simply Good Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Simply Good is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Hain Celestial and Simply Good

The main advantage of trading using opposite Hain Celestial and Simply Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hain Celestial 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.

The idea behind The Hain Celestial and Simply Good Foods 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.