Correlation Between Citizens and Mannatech Incorporated

Can any of the company-specific risk be diversified away by investing in both Citizens 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 Citizens and Mannatech Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens and Mannatech Incorporated, you can compare the effects of market volatilities on Citizens 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 Citizens with a short position of Mannatech Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Mannatech Incorporated.

Diversification Opportunities for Citizens and Mannatech Incorporated

0.39

Correlation Coefficient

Citizens  Mannatech Incorporated

Weak diversification

The 3 months correlation between Citizens and Mannatech is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated and Citizens 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 Citizens 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 Citizens i.e., Citizens and Mannatech Incorporated go up and down completely randomly.

Pair Corralation between Citizens and Mannatech Incorporated

Considering the 90-day investment horizon Citizens is expected to generate 1.34 times more return on investment than Mannatech Incorporated. However, Citizens is 1.34 times more volatile than Mannatech Incorporated. It trades about 0.14 of its potential returns per unit of risk. Mannatech Incorporated is currently generating about 0.1 per unit of risk. If you would invest  307.00  in Citizens on September 5, 2024 and sell it today you would earn a total of  139.00  from holding Citizens or generate 45.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Citizens  vs.  Mannatech Incorporated

Citizens

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Citizens sustained solid returns over the last few months and may actually be approaching a breakup point.

Mannatech Incorporated

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mannatech Incorporated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Mannatech Incorporated showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens and Mannatech Incorporated

The main advantage of trading using opposite Citizens and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens 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.

The idea behind Citizens and Mannatech Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.