Correlation Between Glucose Health and MusclePharm

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

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

Diversification Opportunities for Glucose Health and MusclePharm

0.4

Correlation Coefficient

Glucose Health  MusclePharm

Very weak diversification

The 3 months correlation between Glucose and MusclePharm is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Glucose Health and MusclePharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MusclePharm and Glucose Health 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 Glucose Health are associated (or correlated) with MusclePharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MusclePharm has no effect on the direction of Glucose Health i.e., Glucose Health and MusclePharm go up and down completely randomly.

Pair Corralation between Glucose Health and MusclePharm

Given the investment horizon of 90 days Glucose Health is expected to generate 12.18 times less return on investment than MusclePharm. But when comparing it to its historical volatility, Glucose Health is 5.9 times less risky than MusclePharm. It trades about 0.03 of its potential returns per unit of risk. MusclePharm is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.11  in MusclePharm on October 7, 2024 and sell it today you would lose (0.11) from holding MusclePharm or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	86.54%
Values	Daily Returns

Glucose Health  vs.  MusclePharm

Glucose Health

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Glucose Health are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Glucose Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

MusclePharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MusclePharm has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, MusclePharm is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Glucose Health and MusclePharm

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

The idea behind Glucose Health and MusclePharm 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.