Correlation Between 81619PAA5 and Mannatech Incorporated

Can any of the company-specific risk be diversified away by investing in both 81619PAA5 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 81619PAA5 and Mannatech Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US81619PAA57 and Mannatech Incorporated, you can compare the effects of market volatilities on 81619PAA5 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 81619PAA5 with a short position of Mannatech Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of 81619PAA5 and Mannatech Incorporated.

Diversification Opportunities for 81619PAA5 and Mannatech Incorporated

0.05

Correlation Coefficient

81619PAA5  Mannatech Incorporated

Significant diversification

The 3 months correlation between 81619PAA5 and Mannatech is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding US81619PAA57 and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated and 81619PAA5 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 US81619PAA57 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 81619PAA5 i.e., 81619PAA5 and Mannatech Incorporated go up and down completely randomly.

Pair Corralation between 81619PAA5 and Mannatech Incorporated

Assuming the 90 days trading horizon US81619PAA57 is expected to under-perform the Mannatech Incorporated. But the bond apears to be less risky and, when comparing its historical volatility, US81619PAA57 is 1.6 times less risky than Mannatech Incorporated. The bond trades about -0.04 of its potential returns per unit of risk. The Mannatech Incorporated is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  776.00  in Mannatech Incorporated on September 12, 2024 and sell it today you would earn a total of  401.00  from holding Mannatech Incorporated or generate 51.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	62.9%
Values	Daily Returns

US81619PAA57  vs.  Mannatech Incorporated

US81619PAA57

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US81619PAA57 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US81619PAA57 investors.

Mannatech Incorporated

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mannatech Incorporated are ranked lower than 13 (%) 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 81619PAA5 and Mannatech Incorporated

The main advantage of trading using opposite 81619PAA5 and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 81619PAA5 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 US81619PAA57 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.