Correlation Between John B and Hain Celestial

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

Diversification Opportunities for John B and Hain Celestial

0.73

Correlation Coefficient

John B  Hain Celestial

Poor diversification

The 3 months correlation between John and Hain is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial 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 Hain Celestial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hain Celestial has no effect on the direction of John B i.e., John B and Hain Celestial go up and down completely randomly.

Pair Corralation between John B and Hain Celestial

Given the investment horizon of 90 days John B Sanfilippo is expected to generate 0.44 times more return on investment than Hain Celestial. However, John B Sanfilippo is 2.28 times less risky than Hain Celestial. It trades about -0.15 of its potential returns per unit of risk. The Hain Celestial is currently generating about -0.15 per unit of risk. If you would invest  8,603  in John B Sanfilippo on December 27, 2024 and sell it today you would lose (1,633) from holding John B Sanfilippo or give up 18.98% of portfolio value over 90 days.

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

John B Sanfilippo  vs.  The Hain Celestial

John B Sanfilippo

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with John B and Hain Celestial

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

The idea behind John B Sanfilippo and The Hain Celestial 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.