Correlation Between Natures Sunshine and Greencore Group
Can any of the company-specific risk be diversified away by investing in both Natures Sunshine and Greencore Group 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 Natures Sunshine and Greencore Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natures Sunshine Products and Greencore Group PLC, you can compare the effects of market volatilities on Natures Sunshine and Greencore Group 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 Natures Sunshine with a short position of Greencore Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natures Sunshine and Greencore Group.
Diversification Opportunities for Natures Sunshine and Greencore Group
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Natures and Greencore is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products and Greencore Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencore Group PLC and Natures Sunshine 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 Natures Sunshine Products are associated (or correlated) with Greencore Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencore Group PLC has no effect on the direction of Natures Sunshine i.e., Natures Sunshine and Greencore Group go up and down completely randomly.
Pair Corralation between Natures Sunshine and Greencore Group
Given the investment horizon of 90 days Natures Sunshine Products is expected to generate 6.81 times more return on investment than Greencore Group. However, Natures Sunshine is 6.81 times more volatile than Greencore Group PLC. It trades about 0.28 of its potential returns per unit of risk. Greencore Group PLC is currently generating about -0.32 per unit of risk. If you would invest 1,299 in Natures Sunshine Products on September 4, 2024 and sell it today you would earn a total of 377.00 from holding Natures Sunshine Products or generate 29.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Natures Sunshine Products vs. Greencore Group PLC
Performance |
| Timeline |
| Natures Sunshine Products |
| Greencore Group PLC |
Natures Sunshine and Greencore Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natures Sunshine and Greencore Group
The main advantage of trading using opposite Natures Sunshine and Greencore Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natures Sunshine position performs unexpectedly, Greencore Group 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 Greencore Group will offset losses from the drop in Greencore Group's long position.| Natures Sunshine vs. Seneca Foods Corp | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Associated British Foods |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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