Correlation Between BJs Wholesale and Hain Celestial

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

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

Diversification Opportunities for BJs Wholesale and Hain Celestial

-0.74

Correlation Coefficient

BJs Wholesale  Hain Celestial

Pay attention - limited upside

The 3 months correlation between BJs and Hain is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial and BJs Wholesale 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 BJs Wholesale Club 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 BJs Wholesale i.e., BJs Wholesale and Hain Celestial go up and down completely randomly.

Pair Corralation between BJs Wholesale and Hain Celestial

Allowing for the 90-day total investment horizon BJs Wholesale Club is expected to under-perform the Hain Celestial. But the stock apears to be less risky and, when comparing its historical volatility, BJs Wholesale Club is 2.6 times less risky than Hain Celestial. The stock trades about -0.08 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  694.00  in The Hain Celestial on February 4, 2024 and sell it today you would lose (14.00) from holding The Hain Celestial or give up 2.02% of portfolio value over 90 days.

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

BJs Wholesale Club  vs.  The Hain Celestial

BJs Wholesale Club

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Wholesale Club are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward-looking indicators, BJs Wholesale revealed solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain 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 BJs Wholesale and Hain Celestial

The main advantage of trading using opposite BJs Wholesale and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale 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 BJs Wholesale Club 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.