Correlation Between Mannatech Incorporated and Tyson Foods

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

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

Diversification Opportunities for Mannatech Incorporated and Tyson Foods

0.38

Correlation Coefficient

Mannatech Incorporated  Tyson Foods

Weak diversification

The 3 months correlation between Mannatech and Tyson is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mannatech Incorporated and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods and Mannatech Incorporated 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 Mannatech Incorporated are associated (or correlated) with Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Mannatech Incorporated i.e., Mannatech Incorporated and Tyson Foods go up and down completely randomly.

Pair Corralation between Mannatech Incorporated and Tyson Foods

Given the investment horizon of 90 days Mannatech Incorporated is expected to generate 6.72 times more return on investment than Tyson Foods. However, Mannatech Incorporated is 6.72 times more volatile than Tyson Foods. It trades about 0.38 of its potential returns per unit of risk. Tyson Foods is currently generating about -0.13 per unit of risk. If you would invest  800.00  in Mannatech Incorporated on September 14, 2024 and sell it today you would earn a total of  421.00  from holding Mannatech Incorporated or generate 52.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Mannatech Incorporated  vs.  Tyson Foods

Mannatech Incorporated

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mannatech Incorporated are ranked lower than 15 (%) 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.

Tyson Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tyson Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Tyson Foods is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mannatech Incorporated and Tyson Foods

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

The idea behind Mannatech Incorporated and Tyson 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.