Correlation Between Steven Madden and Mannatech Incorporated

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

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

Diversification Opportunities for Steven Madden and Mannatech Incorporated

-0.16

Correlation Coefficient

Steven Madden  Mannatech Incorporated

Good diversification

The 3 months correlation between Steven and Mannatech is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated and Steven Madden 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 Steven Madden 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 Steven Madden i.e., Steven Madden and Mannatech Incorporated go up and down completely randomly.

Pair Corralation between Steven Madden and Mannatech Incorporated

Given the investment horizon of 90 days Steven Madden is expected to under-perform the Mannatech Incorporated. But the stock apears to be less risky and, when comparing its historical volatility, Steven Madden is 26.91 times less risky than Mannatech Incorporated. The stock trades about -0.01 of its potential returns per unit of risk. The Mannatech Incorporated is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,527  in Mannatech Incorporated on December 4, 2024 and sell it today you would lose (378.00) from holding Mannatech Incorporated or give up 24.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.23%
Values	Daily Returns

Steven Madden  vs.  Mannatech Incorporated

Steven Madden

Risk-Adjusted Performance

Very Weak

Over the last 90 days Steven Madden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mannatech Incorporated

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mannatech Incorporated are ranked lower than 3 (%) 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 Steven Madden and Mannatech Incorporated

The main advantage of trading using opposite Steven Madden and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden 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 Steven Madden 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.