Correlation Between Utz Brands and Simply Good

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

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

Diversification Opportunities for Utz Brands and Simply Good

0.0

Correlation Coefficient

Utz Brands  Simply Good

Pay attention - limited upside

The 3 months correlation between Utz and Simply is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Utz Brands 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 Utz Brands 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 Utz Brands 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 Utz Brands i.e., Utz Brands and Simply Good go up and down completely randomly.

Pair Corralation between Utz Brands and Simply Good

Considering the 90-day investment horizon Utz Brands is expected to under-perform the Simply Good. But the stock apears to be less risky and, when comparing its historical volatility, Utz Brands is 1.1 times less risky than Simply Good. The stock trades about -0.02 of its potential returns per unit of risk. The Simply Good Foods is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,436  in Simply Good Foods on January 10, 2025 and sell it today you would earn a total of  191.00  from holding Simply Good Foods or generate 5.56% return on investment over 90 days.

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

Utz Brands  vs.  Simply Good Foods

Utz Brands

Risk-Adjusted Performance

Very Weak

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

Simply Good Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Simply Good Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Simply Good may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Utz Brands and Simply Good

The main advantage of trading using opposite Utz Brands and Simply Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utz Brands 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 Utz Brands 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.