Correlation Between Chefs Warehouse and Simply Good

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

By analyzing existing cross correlation between The Chefs Warehouse and Simply Good Foods, you can compare the effects of market volatilities on Chefs Warehouse and Simply Good 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 Chefs Warehouse with a short position of Simply Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and Simply Good.

Diversification Opportunities for Chefs Warehouse and Simply Good

-0.23

Correlation Coefficient

Chefs Warehouse  Simply Good

Very good diversification

The 3 months correlation between Chefs and Simply is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse and Simply Good Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simply Good Foods and Chefs Warehouse 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 Chefs Warehouse are associated (or correlated) with Simply Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simply Good Foods has no effect on the direction of Chefs Warehouse i.e., Chefs Warehouse and Simply Good go up and down completely randomly.

Pair Corralation between Chefs Warehouse and Simply Good

Given the investment horizon of 90 days The Chefs Warehouse is expected to generate 1.26 times more return on investment than Simply Good. However, Chefs Warehouse is 1.26 times more volatile than Simply Good Foods. It trades about 0.06 of its potential returns per unit of risk. Simply Good Foods is currently generating about -0.13 per unit of risk. If you would invest  5,763  in The Chefs Warehouse on May 1, 2025 and sell it today you would earn a total of  393.00  from holding The Chefs Warehouse or generate 6.82% return on investment over 90 days.

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

The Chefs Warehouse  vs.  Simply Good Foods

Chefs Warehouse

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Chefs Warehouse are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Chefs Warehouse may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Simply Good Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simply Good Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Chefs Warehouse and Simply Good

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

The idea behind The Chefs Warehouse and Simply Good Foods 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 CEOs Directory module to screen CEOs from public companies around the world.