Correlation Between John B and Aryzta AG

Can any of the company-specific risk be diversified away by investing in both John B and Aryzta AG 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 John B and Aryzta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between John B Sanfilippo and Aryzta AG PK, you can compare the effects of market volatilities on John B and Aryzta AG 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 John B with a short position of Aryzta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Aryzta AG.

Diversification Opportunities for John B and Aryzta AG

0.81

Correlation Coefficient

John B  Aryzta AG

Very poor diversification

The 3 months correlation between John and Aryzta is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Aryzta AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG PK and John B 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 John B Sanfilippo are associated (or correlated) with Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG PK has no effect on the direction of John B i.e., John B and Aryzta AG go up and down completely randomly.

Pair Corralation between John B and Aryzta AG

Given the investment horizon of 90 days John B Sanfilippo is expected to generate 0.91 times more return on investment than Aryzta AG. However, John B Sanfilippo is 1.1 times less risky than Aryzta AG. It trades about -0.07 of its potential returns per unit of risk. Aryzta AG PK is currently generating about -0.11 per unit of risk. If you would invest  9,463  in John B Sanfilippo on September 1, 2024 and sell it today you would lose (828.00) from holding John B Sanfilippo or give up 8.75% of portfolio value over 90 days.

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

John B Sanfilippo  vs.  Aryzta AG PK

John B Sanfilippo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Aryzta AG PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aryzta AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with John B and Aryzta AG

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

The idea behind John B Sanfilippo and Aryzta AG PK 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.