Correlation Between JM Smucker and Hain Celestial

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

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

Diversification Opportunities for JM Smucker and Hain Celestial

0.84

Correlation Coefficient

JM Smucker  Hain Celestial

Very poor diversification

The 3 months correlation between SJM and Hain is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial and JM Smucker 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 JM Smucker 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 JM Smucker i.e., JM Smucker and Hain Celestial go up and down completely randomly.

Pair Corralation between JM Smucker and Hain Celestial

Considering the 90-day investment horizon JM Smucker is expected to under-perform the Hain Celestial. But the stock apears to be less risky and, when comparing its historical volatility, JM Smucker is 2.21 times less risky than Hain Celestial. The stock trades about -0.09 of its potential returns per unit of risk. The The Hain Celestial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  671.00  in The Hain Celestial on February 6, 2024 and sell it today you would lose (12.00) from holding The Hain Celestial or give up 1.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

JM Smucker  vs.  The Hain Celestial

JM Smucker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JM Smucker has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward-looking indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm 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 fragile performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with JM Smucker and Hain Celestial

The main advantage of trading using opposite JM Smucker and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker 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 JM Smucker 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.