Correlation Between Mannatech Incorporated and Bruush Oral

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

By analyzing existing cross correlation between Mannatech Incorporated and Bruush Oral Care, you can compare the effects of market volatilities on Mannatech Incorporated and Bruush Oral 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 Bruush Oral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mannatech Incorporated and Bruush Oral.

Diversification Opportunities for Mannatech Incorporated and Bruush Oral

0.13

Correlation Coefficient

Mannatech Incorporated  Bruush Oral

Average diversification

The 3 months correlation between Mannatech and Bruush is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mannatech Incorporated and Bruush Oral Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruush Oral Care 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 Bruush Oral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruush Oral Care has no effect on the direction of Mannatech Incorporated i.e., Mannatech Incorporated and Bruush Oral go up and down completely randomly.

Pair Corralation between Mannatech Incorporated and Bruush Oral

Given the investment horizon of 90 days Mannatech Incorporated is expected to under-perform the Bruush Oral. But the stock apears to be less risky and, when comparing its historical volatility, Mannatech Incorporated is 11.51 times less risky than Bruush Oral. The stock trades about -0.04 of its potential returns per unit of risk. The Bruush Oral Care is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  44.00  in Bruush Oral Care on February 15, 2024 and sell it today you would lose (43.43) from holding Bruush Oral Care or give up 98.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	63.51%
Values	Daily Returns

Mannatech Incorporated  vs.  Bruush Oral Care

Mannatech Incorporated

Risk-Adjusted Performance

0 of 100

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 June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Bruush Oral Care

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bruush Oral Care are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical indicators, Bruush Oral showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mannatech Incorporated and Bruush Oral

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

The idea behind Mannatech Incorporated and Bruush Oral Care 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.