Correlation Between Natures Sunshine and Laird Superfood
Can any of the company-specific risk be diversified away by investing in both Natures Sunshine and Laird Superfood 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 Laird Superfood 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 Laird Superfood, you can compare the effects of market volatilities on Natures Sunshine and Laird Superfood 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 Laird Superfood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natures Sunshine and Laird Superfood.
Diversification Opportunities for Natures Sunshine and Laird Superfood
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Natures and Laird is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products and Laird Superfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laird Superfood 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 Laird Superfood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laird Superfood has no effect on the direction of Natures Sunshine i.e., Natures Sunshine and Laird Superfood go up and down completely randomly.
Pair Corralation between Natures Sunshine and Laird Superfood
Given the investment horizon of 90 days Natures Sunshine is expected to generate 1.09 times less return on investment than Laird Superfood. But when comparing it to its historical volatility, Natures Sunshine Products is 1.44 times less risky than Laird Superfood. It trades about 0.22 of its potential returns per unit of risk. Laird Superfood is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 724.00 in Laird Superfood on August 28, 2024 and sell it today you would earn a total of 161.00 from holding Laird Superfood or generate 22.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natures Sunshine Products vs. Laird Superfood
Performance |
| Timeline |
| Natures Sunshine Products |
| Laird Superfood |
Natures Sunshine and Laird Superfood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natures Sunshine and Laird Superfood
The main advantage of trading using opposite Natures Sunshine and Laird Superfood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natures Sunshine position performs unexpectedly, Laird Superfood 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 Laird Superfood will offset losses from the drop in Laird Superfood'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 |
| Laird Superfood vs. Better Choice | Laird Superfood vs. Sharing Services Global | Laird Superfood vs. Bit Origin | Laird Superfood vs. Planet Green 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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