Correlation Between Natures Sunshine and Stryve Foods

Can any of the company-specific risk be diversified away by investing in both Natures Sunshine and Stryve Foods 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 Stryve Foods 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 Stryve Foods, you can compare the effects of market volatilities on Natures Sunshine and Stryve Foods 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 Stryve Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natures Sunshine and Stryve Foods.

Diversification Opportunities for Natures Sunshine and Stryve Foods

-0.41

Correlation Coefficient

Natures Sunshine  Stryve Foods

Very good diversification

The 3 months correlation between Natures and Stryve is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products and Stryve Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryve Foods 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 Stryve Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryve Foods has no effect on the direction of Natures Sunshine i.e., Natures Sunshine and Stryve Foods go up and down completely randomly.

Pair Corralation between Natures Sunshine and Stryve Foods

Given the investment horizon of 90 days Natures Sunshine Products is expected to generate 0.46 times more return on investment than Stryve Foods. However, Natures Sunshine Products is 2.18 times less risky than Stryve Foods. It trades about 0.07 of its potential returns per unit of risk. Stryve Foods is currently generating about -0.12 per unit of risk. If you would invest  1,406  in Natures Sunshine Products on September 13, 2024 and sell it today you would earn a total of  176.00  from holding Natures Sunshine Products or generate 12.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Natures Sunshine Products  vs.  Stryve Foods

Natures Sunshine Products

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Natures Sunshine Products are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Natures Sunshine reported solid returns over the last few months and may actually be approaching a breakup point.

Stryve Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stryve Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Natures Sunshine and Stryve Foods

The main advantage of trading using opposite Natures Sunshine and Stryve Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natures Sunshine position performs unexpectedly, Stryve Foods 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 Stryve Foods will offset losses from the drop in Stryve Foods' long position.

The idea behind Natures Sunshine Products and Stryve Foods 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.