Correlation Between Natures Sunshine and Tattooed Chef
Can any of the company-specific risk be diversified away by investing in both Natures Sunshine and Tattooed Chef 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 Tattooed Chef 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 Tattooed Chef, you can compare the effects of market volatilities on Natures Sunshine and Tattooed Chef 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 Tattooed Chef. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natures Sunshine and Tattooed Chef.
Diversification Opportunities for Natures Sunshine and Tattooed Chef
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natures and Tattooed is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products and Tattooed Chef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tattooed Chef 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 Tattooed Chef. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tattooed Chef has no effect on the direction of Natures Sunshine i.e., Natures Sunshine and Tattooed Chef go up and down completely randomly.
Pair Corralation between Natures Sunshine and Tattooed Chef
Given the investment horizon of 90 days Natures Sunshine Products is expected to generate 0.34 times more return on investment than Tattooed Chef. However, Natures Sunshine Products is 2.97 times less risky than Tattooed Chef. It trades about 0.05 of its potential returns per unit of risk. Tattooed Chef is currently generating about -0.24 per unit of risk. If you would invest 935.00 in Natures Sunshine Products on August 27, 2024 and sell it today you would earn a total of 665.00 from holding Natures Sunshine Products or generate 71.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 25.49% |
| Values | Daily Returns |
Natures Sunshine Products vs. Tattooed Chef
Performance |
| Timeline |
| Natures Sunshine Products |
| Tattooed Chef |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Natures Sunshine and Tattooed Chef Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natures Sunshine and Tattooed Chef
The main advantage of trading using opposite Natures Sunshine and Tattooed Chef positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natures Sunshine position performs unexpectedly, Tattooed Chef 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 Tattooed Chef will offset losses from the drop in Tattooed Chef'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 |
| Tattooed Chef vs. Kraft Heinz Co | Tattooed Chef vs. Hormel Foods | Tattooed Chef vs. Kellanova | Tattooed Chef vs. Blue Star Foods |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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