Correlation Between Else Nutrition and Natures Sunshine

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

By analyzing existing cross correlation between Else Nutrition Holdings and Natures Sunshine Products, you can compare the effects of market volatilities on Else Nutrition and Natures Sunshine 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 Else Nutrition with a short position of Natures Sunshine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Else Nutrition and Natures Sunshine.

Diversification Opportunities for Else Nutrition and Natures Sunshine

-0.66

Correlation Coefficient

Else Nutrition  Natures Sunshine

Excellent diversification

The 3 months correlation between Else and Natures is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Else Nutrition Holdings and Natures Sunshine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Sunshine Products and Else Nutrition 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 Else Nutrition Holdings are associated (or correlated) with Natures Sunshine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Sunshine Products has no effect on the direction of Else Nutrition i.e., Else Nutrition and Natures Sunshine go up and down completely randomly.

Pair Corralation between Else Nutrition and Natures Sunshine

Assuming the 90 days horizon Else Nutrition Holdings is expected to under-perform the Natures Sunshine. In addition to that, Else Nutrition is 4.71 times more volatile than Natures Sunshine Products. It trades about -0.05 of its total potential returns per unit of risk. Natures Sunshine Products is currently generating about 0.07 per unit of volatility. If you would invest  1,316  in Natures Sunshine Products on October 5, 2024 and sell it today you would earn a total of  140.00  from holding Natures Sunshine Products or generate 10.64% return on investment over 90 days.

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

Else Nutrition Holdings  vs.  Natures Sunshine Products

Else Nutrition Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Else Nutrition Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Natures Sunshine Products

Risk-Adjusted Performance

5 of 100

Insignificant

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.

Pair Trading with Else Nutrition and Natures Sunshine

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

The idea behind Else Nutrition Holdings and Natures Sunshine Products 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.