Correlation Between Natures Sunshine and John B

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

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

Diversification Opportunities for Natures Sunshine and John B

0.54

Correlation Coefficient

Natures Sunshine  John B

Very weak diversification

The 3 months correlation between Natures and John is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo and Natures Sunshine 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 Natures Sunshine Products are associated (or correlated) with John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Natures Sunshine i.e., Natures Sunshine and John B go up and down completely randomly.

Pair Corralation between Natures Sunshine and John B

Given the investment horizon of 90 days Natures Sunshine Products is expected to generate 1.03 times more return on investment than John B. However, Natures Sunshine is 1.03 times more volatile than John B Sanfilippo. It trades about -0.11 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.15 per unit of risk. If you would invest  1,478  in Natures Sunshine Products on December 28, 2024 and sell it today you would lose (217.00) from holding Natures Sunshine Products or give up 14.68% of portfolio value over 90 days.

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

Natures Sunshine Products  vs.  John B Sanfilippo

Natures Sunshine Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natures Sunshine Products has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with Natures Sunshine and John B

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

The idea behind Natures Sunshine Products and John B Sanfilippo 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.