Correlation Between Dana and Mannatech Incorporated
Can any of the company-specific risk be diversified away by investing in both Dana and Mannatech Incorporated 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 Dana and Mannatech Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Inc and Mannatech Incorporated, you can compare the effects of market volatilities on Dana and Mannatech Incorporated 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 Dana with a short position of Mannatech Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and Mannatech Incorporated.
Diversification Opportunities for Dana and Mannatech Incorporated
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dana and Mannatech is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated and Dana 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 Dana Inc are associated (or correlated) with Mannatech Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mannatech Incorporated has no effect on the direction of Dana i.e., Dana and Mannatech Incorporated go up and down completely randomly.
Pair Corralation between Dana and Mannatech Incorporated
Considering the 90-day investment horizon Dana Inc is expected to under-perform the Mannatech Incorporated. But the stock apears to be less risky and, when comparing its historical volatility, Dana Inc is 17.09 times less risky than Mannatech Incorporated. The stock trades about -0.01 of its potential returns per unit of risk. The Mannatech Incorporated is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,123 in Mannatech Incorporated on September 4, 2024 and sell it today you would lose (1,211) from holding Mannatech Incorporated or give up 57.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.34% |
| Values | Daily Returns |
Dana Inc vs. Mannatech Incorporated
Performance |
| Timeline |
| Dana Inc |
| Mannatech Incorporated |
Dana and Mannatech Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana and Mannatech Incorporated
The main advantage of trading using opposite Dana and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, Mannatech Incorporated 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 Mannatech Incorporated will offset losses from the drop in Mannatech Incorporated's long position.The idea behind Dana Inc and Mannatech Incorporated 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.| Mannatech Incorporated vs. Edgewell Personal Care | Mannatech Incorporated vs. Inter Parfums | Mannatech Incorporated vs. Nu Skin Enterprises | Mannatech Incorporated vs. Helen of Troy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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