Correlation Between Hain Celestial and BG Foods
Can any of the company-specific risk be diversified away by investing in both Hain Celestial and BG Foods 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 Hain Celestial and BG Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hain Celestial and BG Foods, you can compare the effects of market volatilities on Hain Celestial and BG Foods 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 Hain Celestial with a short position of BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hain Celestial and BG Foods.
Diversification Opportunities for Hain Celestial and BG Foods
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hain and BGS is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Hain Celestial and BG Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods and Hain Celestial 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 The Hain Celestial are associated (or correlated) with BG Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Foods has no effect on the direction of Hain Celestial i.e., Hain Celestial and BG Foods go up and down completely randomly.
Pair Corralation between Hain Celestial and BG Foods
Given the investment horizon of 90 days The Hain Celestial is expected to under-perform the BG Foods. But the stock apears to be less risky and, when comparing its historical volatility, The Hain Celestial is 1.04 times less risky than BG Foods. The stock trades about -0.13 of its potential returns per unit of risk. The BG Foods is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,531 in BG Foods on January 26, 2024 and sell it today you would lose (426.00) from holding BG Foods or give up 27.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hain Celestial vs. BG Foods
Performance |
| Timeline |
| Hain Celestial |
| BG Foods |
Hain Celestial and BG Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hain Celestial and BG Foods
The main advantage of trading using opposite Hain Celestial and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hain Celestial position performs unexpectedly, BG Foods 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 BG Foods will offset losses from the drop in BG Foods' long position.| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good Foods |
Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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