Correlation Between Sovos Brands and John B

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

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

Diversification Opportunities for Sovos Brands and John B

-0.67

Correlation Coefficient

Sovos Brands  John B

Excellent diversification

The 3 months correlation between Sovos and John is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sovos Brands 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 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 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 Sovos Brands i.e., Sovos Brands and John B go up and down completely randomly.

Pair Corralation between Sovos Brands and John B

If you would invest  8,204  in John B Sanfilippo on September 21, 2024 and sell it today you would earn a total of  364.00  from holding John B Sanfilippo or generate 4.44% return on investment over 90 days.

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

Sovos Brands  vs.  John B Sanfilippo

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.

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sovos Brands and John B

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