Correlation Between Constellation Brands and Mannatech Incorporated
Can any of the company-specific risk be diversified away by investing in both Constellation Brands and Mannatech Incorporated 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 Constellation Brands and Mannatech Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Brands Class and Mannatech Incorporated, you can compare the effects of market volatilities on Constellation Brands and Mannatech Incorporated 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 Constellation Brands with a short position of Mannatech Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and Mannatech Incorporated.
Diversification Opportunities for Constellation Brands and Mannatech Incorporated
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Constellation and Mannatech is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with Mannatech Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mannatech Incorporated has no effect on the direction of Constellation Brands i.e., Constellation Brands and Mannatech Incorporated go up and down completely randomly.
Pair Corralation between Constellation Brands and Mannatech Incorporated
Considering the 90-day investment horizon Constellation Brands Class is expected to generate 0.31 times more return on investment than Mannatech Incorporated. However, Constellation Brands Class is 3.26 times less risky than Mannatech Incorporated. It trades about 0.02 of its potential returns per unit of risk. Mannatech Incorporated is currently generating about 0.0 per unit of risk. If you would invest 23,508 in Constellation Brands Class on August 30, 2024 and sell it today you would earn a total of 89.00 from holding Constellation Brands Class or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Constellation Brands Class vs. Mannatech Incorporated
Performance |
| Timeline |
| Constellation Brands |
| Mannatech Incorporated |
Constellation Brands and Mannatech Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Brands and Mannatech Incorporated
The main advantage of trading using opposite Constellation Brands and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Brands position performs unexpectedly, Mannatech Incorporated 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 Mannatech Incorporated will offset losses from the drop in Mannatech Incorporated's long position.| Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
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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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