Correlation Between Hain Celestial and Farmer Bros
Can any of the company-specific risk be diversified away by investing in both Hain Celestial and Farmer Bros 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 Farmer Bros 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 Farmer Bros Co, you can compare the effects of market volatilities on Hain Celestial and Farmer Bros 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 Farmer Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hain Celestial and Farmer Bros.
Diversification Opportunities for Hain Celestial and Farmer Bros
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hain and Farmer is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Hain Celestial and Farmer Bros Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmer Bros 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 Farmer Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmer Bros has no effect on the direction of Hain Celestial i.e., Hain Celestial and Farmer Bros go up and down completely randomly.
Pair Corralation between Hain Celestial and Farmer Bros
Given the investment horizon of 90 days The Hain Celestial is expected to under-perform the Farmer Bros. In addition to that, Hain Celestial is 1.55 times more volatile than Farmer Bros Co. It trades about -0.34 of its total potential returns per unit of risk. Farmer Bros Co is currently generating about -0.18 per unit of volatility. If you would invest 345.00 in Farmer Bros Co on January 25, 2024 and sell it today you would lose (29.00) from holding Farmer Bros Co or give up 8.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hain Celestial vs. Farmer Bros Co
Performance |
| Timeline |
| Hain Celestial |
| Farmer Bros |
Hain Celestial and Farmer Bros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hain Celestial and Farmer Bros
The main advantage of trading using opposite Hain Celestial and Farmer Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hain Celestial position performs unexpectedly, Farmer Bros 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 Farmer Bros will offset losses from the drop in Farmer Bros' long position.| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good Foods |
| Farmer Bros vs. Bridgford Foods | Farmer Bros vs. Seneca Foods Corp | Farmer Bros vs. Lifeway Foods | Farmer Bros vs. J J Snack |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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