Correlation Between Danone PK and Natures Sunshine
Can any of the company-specific risk be diversified away by investing in both Danone PK and Natures Sunshine 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 Danone PK and Natures Sunshine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danone PK and Natures Sunshine Products, you can compare the effects of market volatilities on Danone PK and Natures Sunshine 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 Danone PK with a short position of Natures Sunshine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danone PK and Natures Sunshine.
Diversification Opportunities for Danone PK and Natures Sunshine
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Danone and Natures is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Danone PK and Natures Sunshine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Sunshine Products and Danone PK 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 Danone PK are associated (or correlated) with Natures Sunshine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Sunshine Products has no effect on the direction of Danone PK i.e., Danone PK and Natures Sunshine go up and down completely randomly.
Pair Corralation between Danone PK and Natures Sunshine
If you would invest 1,375 in Natures Sunshine Products on September 2, 2024 and sell it today you would earn a total of 249.00 from holding Natures Sunshine Products or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Danone PK vs. Natures Sunshine Products
Performance |
| Timeline |
| Danone PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Natures Sunshine Products |
Danone PK and Natures Sunshine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danone PK and Natures Sunshine
The main advantage of trading using opposite Danone PK and Natures Sunshine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danone PK position performs unexpectedly, Natures Sunshine 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 Natures Sunshine will offset losses from the drop in Natures Sunshine's long position.| Danone PK vs. Heineken NV | Danone PK vs. Reckitt Benckiser Group | Danone PK vs. LOreal Co ADR | Danone PK vs. BASF SE ADR |
| Natures Sunshine vs. Seneca Foods Corp | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Associated British Foods |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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