Correlation Between Mannatech Incorporated and Borealis Foods
Can any of the company-specific risk be diversified away by investing in both Mannatech Incorporated and Borealis Foods 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 Mannatech Incorporated and Borealis Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mannatech Incorporated and Borealis Foods, you can compare the effects of market volatilities on Mannatech Incorporated and Borealis Foods 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 Mannatech Incorporated with a short position of Borealis Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mannatech Incorporated and Borealis Foods.
Diversification Opportunities for Mannatech Incorporated and Borealis Foods
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mannatech and Borealis is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mannatech Incorporated and Borealis Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borealis Foods and Mannatech Incorporated 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 Mannatech Incorporated are associated (or correlated) with Borealis Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borealis Foods has no effect on the direction of Mannatech Incorporated i.e., Mannatech Incorporated and Borealis Foods go up and down completely randomly.
Pair Corralation between Mannatech Incorporated and Borealis Foods
Given the investment horizon of 90 days Mannatech Incorporated is expected to generate 3.92 times more return on investment than Borealis Foods. However, Mannatech Incorporated is 3.92 times more volatile than Borealis Foods. It trades about 0.04 of its potential returns per unit of risk. Borealis Foods is currently generating about 0.06 per unit of risk. If you would invest 1,945 in Mannatech Incorporated on September 6, 2024 and sell it today you would lose (895.00) from holding Mannatech Incorporated or give up 46.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 41.97% |
| Values | Daily Returns |
Mannatech Incorporated vs. Borealis Foods
Performance |
| Timeline |
| Mannatech Incorporated |
| Borealis Foods |
Mannatech Incorporated and Borealis Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mannatech Incorporated and Borealis Foods
The main advantage of trading using opposite Mannatech Incorporated and Borealis Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mannatech Incorporated position performs unexpectedly, Borealis Foods 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 Borealis Foods will offset losses from the drop in Borealis Foods' long position.| Mannatech Incorporated vs. Edgewell Personal Care | Mannatech Incorporated vs. Inter Parfums | Mannatech Incorporated vs. Nu Skin Enterprises | Mannatech Incorporated vs. Helen of Troy |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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