Correlation Between Hain Celestial and Archer Daniels

Can any of the company-specific risk be diversified away by investing in both Hain Celestial and Archer Daniels 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 Archer Daniels 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 Archer Daniels Midland, you can compare the effects of market volatilities on Hain Celestial and Archer Daniels 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 Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hain Celestial and Archer Daniels.

Diversification Opportunities for Hain Celestial and Archer Daniels

-0.81

Correlation Coefficient

Hain Celestial  Archer Daniels

Pay attention - limited upside

The 3 months correlation between Hain and Archer is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Hain Celestial and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland 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 Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of Hain Celestial i.e., Hain Celestial and Archer Daniels go up and down completely randomly.

Pair Corralation between Hain Celestial and Archer Daniels

Given the investment horizon of 90 days The Hain Celestial is expected to generate 2.49 times more return on investment than Archer Daniels. However, Hain Celestial is 2.49 times more volatile than Archer Daniels Midland. It trades about -0.01 of its potential returns per unit of risk. Archer Daniels Midland is currently generating about -0.15 per unit of risk. If you would invest  671.00  in The Hain Celestial on February 7, 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 Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

The Hain Celestial  vs.  Archer Daniels Midland

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.

Archer Daniels Midland

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Archer Daniels Midland are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Archer Daniels displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hain Celestial and Archer Daniels

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

The idea behind The Hain Celestial and Archer Daniels Midland 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.