Correlation Between Sovos Brands and Hain Celestial

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

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

Diversification Opportunities for Sovos Brands and Hain Celestial

-0.01

Correlation Coefficient

Sovos Brands  Hain Celestial

Good diversification

The 3 months correlation between Sovos and Hain is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sovos Brands and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial and Sovos Brands 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 Sovos Brands 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 Sovos Brands i.e., Sovos Brands and Hain Celestial go up and down completely randomly.

Pair Corralation between Sovos Brands and Hain Celestial

If you would invest  1,862  in Sovos Brands on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Sovos Brands or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Sovos Brands  vs.  The Hain Celestial

Sovos Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sovos Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sovos Brands is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Hain Celestial

Risk-Adjusted Performance

0 of 100

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 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 Sovos Brands and Hain Celestial

The main advantage of trading using opposite Sovos Brands and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sovos Brands 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 Sovos Brands 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.