Correlation Between Tyson Foods and Mannatech Incorporated
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Mannatech Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Mannatech Incorporated, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Mannatech Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Mannatech Incorporated.
Diversification Opportunities for Tyson Foods and Mannatech Incorporated
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tyson and Mannatech is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Mannatech Incorporated go up and down completely randomly.
Pair Corralation between Tyson Foods and Mannatech Incorporated
Considering the 90-day investment horizon Tyson Foods is expected to generate 29.2 times less return on investment than Mannatech Incorporated. But when comparing it to its historical volatility, Tyson Foods is 39.37 times less risky than Mannatech Incorporated. It trades about 0.06 of its potential returns per unit of risk. Mannatech Incorporated is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,231 in Mannatech Incorporated on August 31, 2024 and sell it today you would lose (381.00) from holding Mannatech Incorporated or give up 30.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.51% |
| Values | Daily Returns |
Tyson Foods vs. Mannatech Incorporated
Performance |
| Timeline |
| Tyson Foods |
| Mannatech Incorporated |
Tyson Foods and Mannatech Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Mannatech Incorporated
The main advantage of trading using opposite Tyson Foods and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA | Tyson Foods vs. Fresh Del Monte |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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