Correlation Between J J and Hain Celestial

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

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

Diversification Opportunities for J J and Hain Celestial

-0.1

Correlation Coefficient

J J  Hain Celestial

Good diversification

The 3 months correlation between JJSF and Hain is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial and J J 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 J J Snack 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 J J i.e., J J and Hain Celestial go up and down completely randomly.

Pair Corralation between J J and Hain Celestial

Given the investment horizon of 90 days J J is expected to generate 1.31 times less return on investment than Hain Celestial. But when comparing it to its historical volatility, J J Snack is 2.67 times less risky than Hain Celestial. It trades about 0.03 of its potential returns per unit of risk. The Hain Celestial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  832.00  in The Hain Celestial on September 2, 2024 and sell it today you would lose (5.00) from holding The Hain Celestial or give up 0.6% of portfolio value over 90 days.

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

J J Snack  vs.  The Hain Celestial

J J Snack

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in J J Snack are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, J J is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Hain Celestial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Hain Celestial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Hain Celestial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with J J and Hain Celestial

The main advantage of trading using opposite J J and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J J 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 J J Snack 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.