Correlation Between Pilgrims Pride and Sprouts Farmers

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

By analyzing existing cross correlation between Pilgrims Pride Corp and Sprouts Farmers Market, you can compare the effects of market volatilities on Pilgrims Pride and Sprouts Farmers 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 Pilgrims Pride with a short position of Sprouts Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pilgrims Pride and Sprouts Farmers.

Diversification Opportunities for Pilgrims Pride and Sprouts Farmers

0.93

Correlation Coefficient

Pilgrims Pride  Sprouts Farmers

Almost no diversification

The 3 months correlation between Pilgrims and Sprouts is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pilgrims Pride Corp and Sprouts Farmers Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprouts Farmers Market and Pilgrims Pride 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 Pilgrims Pride Corp are associated (or correlated) with Sprouts Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprouts Farmers Market has no effect on the direction of Pilgrims Pride i.e., Pilgrims Pride and Sprouts Farmers go up and down completely randomly.

Pair Corralation between Pilgrims Pride and Sprouts Farmers

Considering the 90-day investment horizon Pilgrims Pride Corp is expected to generate 0.87 times more return on investment than Sprouts Farmers. However, Pilgrims Pride Corp is 1.16 times less risky than Sprouts Farmers. It trades about -0.18 of its potential returns per unit of risk. Sprouts Farmers Market is currently generating about -0.33 per unit of risk. If you would invest  4,560  in Pilgrims Pride Corp on July 30, 2025 and sell it today you would lose (769.00) from holding Pilgrims Pride Corp or give up 16.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Pilgrims Pride Corp  vs.  Sprouts Farmers Market

Pilgrims Pride Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Pilgrims Pride Corp 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 basic indicators remain rather sound which may send shares a bit higher in November 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sprouts Farmers Market

Risk-Adjusted Performance

Weakest

Over the last 90 days Sprouts Farmers Market has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Pilgrims Pride and Sprouts Farmers

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

The idea behind Pilgrims Pride Corp and Sprouts Farmers Market 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.