Correlation Between Pilgrims Pride and John B

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

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

Diversification Opportunities for Pilgrims Pride and John B

-0.81

Correlation Coefficient

Pilgrims Pride  John B

Pay attention - limited upside

The 3 months correlation between Pilgrims and John is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pilgrims Pride Corp 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 Pilgrims Pride 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 Pilgrims Pride Corp 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 Pilgrims Pride i.e., Pilgrims Pride and John B go up and down completely randomly.

Pair Corralation between Pilgrims Pride and John B

Considering the 90-day investment horizon Pilgrims Pride Corp is expected to generate 1.22 times more return on investment than John B. However, Pilgrims Pride is 1.22 times more volatile than John B Sanfilippo. It trades about 0.13 of its potential returns per unit of risk. John B Sanfilippo is currently generating about 0.0 per unit of risk. If you would invest  4,127  in Pilgrims Pride Corp on September 12, 2024 and sell it today you would earn a total of  750.00  from holding Pilgrims Pride Corp or generate 18.17% return on investment over 90 days.

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

Pilgrims Pride Corp  vs.  John B Sanfilippo

Pilgrims Pride Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pilgrims Pride Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Pilgrims Pride exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 comparatively stable basic indicators, John B is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pilgrims Pride and John B

The main advantage of trading using opposite Pilgrims Pride and John B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pilgrims Pride 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 Pilgrims Pride Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.