Correlation Between Natures Sunshine and MamaMancinis Holdings
Can any of the company-specific risk be diversified away by investing in both Natures Sunshine and MamaMancinis Holdings 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 MamaMancinis Holdings 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 MamaMancinis Holdings, you can compare the effects of market volatilities on Natures Sunshine and MamaMancinis Holdings 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 MamaMancinis Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natures Sunshine and MamaMancinis Holdings.
Diversification Opportunities for Natures Sunshine and MamaMancinis Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Natures and MamaMancinis is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products and MamaMancinis Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MamaMancinis Holdings 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 MamaMancinis Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MamaMancinis Holdings has no effect on the direction of Natures Sunshine i.e., Natures Sunshine and MamaMancinis Holdings go up and down completely randomly.
Pair Corralation between Natures Sunshine and MamaMancinis Holdings
Given the investment horizon of 90 days Natures Sunshine is expected to generate 3.82 times less return on investment than MamaMancinis Holdings. But when comparing it to its historical volatility, Natures Sunshine Products is 1.43 times less risky than MamaMancinis Holdings. It trades about 0.05 of its potential returns per unit of risk. MamaMancinis Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 199.00 in MamaMancinis Holdings on August 27, 2024 and sell it today you would earn a total of 170.00 from holding MamaMancinis Holdings or generate 85.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 25.71% |
| Values | Daily Returns |
Natures Sunshine Products vs. MamaMancinis Holdings
Performance |
| Timeline |
| Natures Sunshine Products |
| MamaMancinis Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Natures Sunshine and MamaMancinis Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natures Sunshine and MamaMancinis Holdings
The main advantage of trading using opposite Natures Sunshine and MamaMancinis Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natures Sunshine position performs unexpectedly, MamaMancinis Holdings 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 MamaMancinis Holdings will offset losses from the drop in MamaMancinis Holdings' 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 |
| MamaMancinis Holdings vs. Seneca Foods Corp | MamaMancinis Holdings vs. Central Garden Pet | MamaMancinis Holdings vs. Central Garden Pet | MamaMancinis Holdings vs. Natures Sunshine Products |
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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