Correlation Between Natural Alternatives and Acme United
Can any of the company-specific risk be diversified away by investing in both Natural Alternatives and Acme United 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 Natural Alternatives and Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Alternatives International and Acme United, you can compare the effects of market volatilities on Natural Alternatives and Acme United 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 Natural Alternatives with a short position of Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Alternatives and Acme United.
Diversification Opportunities for Natural Alternatives and Acme United
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Natural and Acme is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Natural Alternatives Internati and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United and Natural Alternatives 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 Natural Alternatives International are associated (or correlated) with Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of Natural Alternatives i.e., Natural Alternatives and Acme United go up and down completely randomly.
Pair Corralation between Natural Alternatives and Acme United
Given the investment horizon of 90 days Natural Alternatives International is expected to under-perform the Acme United. In addition to that, Natural Alternatives is 1.13 times more volatile than Acme United. It trades about -0.03 of its total potential returns per unit of risk. Acme United is currently generating about 0.03 per unit of volatility. If you would invest 3,941 in Acme United on September 3, 2024 and sell it today you would earn a total of 477.00 from holding Acme United or generate 12.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Alternatives Internati vs. Acme United
Performance |
| Timeline |
| Natural Alternatives |
| Acme United |
Natural Alternatives and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Alternatives and Acme United
The main advantage of trading using opposite Natural Alternatives and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Alternatives position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| Natural Alternatives vs. FitLife Brands, Common | Natural Alternatives vs. Lifeway Foods | Natural Alternatives vs. Else Nutrition Holdings | Natural Alternatives vs. Central Garden Pet |
| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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