Correlation Between John B and Whole Earth

Can any of the company-specific risk be diversified away by investing in both John B and Whole Earth 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 Whole Earth 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 Whole Earth Brands, you can compare the effects of market volatilities on John B and Whole Earth 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 Whole Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Whole Earth.

Diversification Opportunities for John B and Whole Earth

-0.77

Correlation Coefficient

John B  Whole Earth

Pay attention - limited upside

The 3 months correlation between John and Whole is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Whole Earth Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whole Earth Brands 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 Whole Earth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whole Earth Brands has no effect on the direction of John B i.e., John B and Whole Earth go up and down completely randomly.

Pair Corralation between John B and Whole Earth

If you would invest (100.00) in Whole Earth Brands on September 3, 2024 and sell it today you would earn a total of  100.00  from holding Whole Earth Brands or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

John B Sanfilippo  vs.  Whole Earth Brands

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.

Whole Earth Brands

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with John B and Whole Earth

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

The idea behind John B Sanfilippo and Whole Earth Brands 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.