Correlation Between Helen Of and Mannatech Incorporated

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

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

Diversification Opportunities for Helen Of and Mannatech Incorporated

0.52

Correlation Coefficient

Helen Of  Mannatech Incorporated

Very weak diversification

The 3 months correlation between Helen and Mannatech is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Helen of Troy and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated and Helen Of 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 Helen of Troy 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 Helen Of i.e., Helen Of and Mannatech Incorporated go up and down completely randomly.

Pair Corralation between Helen Of and Mannatech Incorporated

Given the investment horizon of 90 days Helen of Troy is expected to generate 0.54 times more return on investment than Mannatech Incorporated. However, Helen of Troy is 1.86 times less risky than Mannatech Incorporated. It trades about -0.06 of its potential returns per unit of risk. Mannatech Incorporated is currently generating about -0.15 per unit of risk. If you would invest  5,946  in Helen of Troy on December 30, 2024 and sell it today you would lose (544.00) from holding Helen of Troy or give up 9.15% of portfolio value over 90 days.

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

Helen of Troy  vs.  Mannatech Incorporated

Helen of Troy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helen of Troy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Mannatech Incorporated

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Helen Of and Mannatech Incorporated

The main advantage of trading using opposite Helen Of and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helen Of 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 Helen of Troy 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.