Correlation Between Mannatech Incorporated and L’Oreal Co
Can any of the company-specific risk be diversified away by investing in both Mannatech Incorporated and L’Oreal Co 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 L’Oreal Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mannatech Incorporated and LOreal Co ADR, you can compare the effects of market volatilities on Mannatech Incorporated and L’Oreal Co 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 L’Oreal Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mannatech Incorporated and L’Oreal Co.
Diversification Opportunities for Mannatech Incorporated and L’Oreal Co
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mannatech and L’Oreal is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mannatech Incorporated and LOreal Co ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOreal Co ADR 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 L’Oreal Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOreal Co ADR has no effect on the direction of Mannatech Incorporated i.e., Mannatech Incorporated and L’Oreal Co go up and down completely randomly.
Pair Corralation between Mannatech Incorporated and L’Oreal Co
Given the investment horizon of 90 days Mannatech Incorporated is expected to generate 30.78 times more return on investment than L’Oreal Co. However, Mannatech Incorporated is 30.78 times more volatile than LOreal Co ADR. It trades about 0.04 of its potential returns per unit of risk. LOreal Co ADR is currently generating about 0.0 per unit of risk. If you would invest 2,153 in Mannatech Incorporated on August 24, 2024 and sell it today you would lose (1,313) from holding Mannatech Incorporated or give up 60.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.56% |
| Values | Daily Returns |
Mannatech Incorporated vs. LOreal Co ADR
Performance |
| Timeline |
| Mannatech Incorporated |
| LOreal Co ADR |
Mannatech Incorporated and L’Oreal Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mannatech Incorporated and L’Oreal Co
The main advantage of trading using opposite Mannatech Incorporated and L’Oreal Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mannatech Incorporated position performs unexpectedly, L’Oreal Co 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 L’Oreal Co will offset losses from the drop in L’Oreal Co's 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 |
| L’Oreal Co vs. Unilever PLC | L’Oreal Co vs. Estee Lauder Companies | L’Oreal Co vs. Church Dwight | L’Oreal Co vs. Mannatech Incorporated |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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