Correlation Between Simply Good and Sow Good

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

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

Diversification Opportunities for Simply Good and Sow Good

-0.39

Correlation Coefficient

Simply Good  Sow Good

Very good diversification

The 3 months correlation between Simply and Sow is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Simply Good Foods and Sow Good Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sow Good Common and Simply Good 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 Simply Good Foods are associated (or correlated) with Sow Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sow Good Common has no effect on the direction of Simply Good i.e., Simply Good and Sow Good go up and down completely randomly.

Pair Corralation between Simply Good and Sow Good

Given the investment horizon of 90 days Simply Good Foods is expected to under-perform the Sow Good. But the stock apears to be less risky and, when comparing its historical volatility, Simply Good Foods is 7.29 times less risky than Sow Good. The stock trades about -0.2 of its potential returns per unit of risk. The Sow Good Common is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Sow Good Common on May 5, 2025 and sell it today you would earn a total of  24.00  from holding Sow Good Common or generate 38.1% return on investment over 90 days.

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

Simply Good Foods  vs.  Sow Good Common

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 weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sow Good Common

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sow Good Common are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Sow Good reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simply Good and Sow Good

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

The idea behind Simply Good Foods and Sow Good Common 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.