Correlation Between Beyond and Mead Johnson

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

By analyzing existing cross correlation between Beyond Inc and Mead Johnson Nutrition, you can compare the effects of market volatilities on Beyond and Mead Johnson 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 Beyond with a short position of Mead Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond and Mead Johnson.

Diversification Opportunities for Beyond and Mead Johnson

0.0

Correlation Coefficient

Beyond  Mead Johnson

Pay attention - limited upside

The 3 months correlation between Beyond and Mead is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Inc and Mead Johnson Nutrition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mead Johnson Nutrition and Beyond 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 Beyond Inc are associated (or correlated) with Mead Johnson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mead Johnson Nutrition has no effect on the direction of Beyond i.e., Beyond and Mead Johnson go up and down completely randomly.

Pair Corralation between Beyond and Mead Johnson

If you would invest  2,826  in Beyond Inc on February 3, 2024 and sell it today you would lose (781.00) from holding Beyond Inc or give up 27.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Beyond Inc  vs.  Mead Johnson Nutrition

Beyond Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mead Johnson Nutrition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Beyond and Mead Johnson

The main advantage of trading using opposite Beyond and Mead Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond position performs unexpectedly, Mead Johnson 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 Mead Johnson will offset losses from the drop in Mead Johnson's long position.

The idea behind Beyond Inc and Mead Johnson Nutrition 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..