Correlation Between Nu Skin and Brown Forman
Can any of the company-specific risk be diversified away by investing in both Nu Skin and Brown Forman 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 Nu Skin and Brown Forman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Skin Enterprises and Brown Forman, you can compare the effects of market volatilities on Nu Skin and Brown Forman 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 Nu Skin with a short position of Brown Forman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Skin and Brown Forman.
Diversification Opportunities for Nu Skin and Brown Forman
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NUS and Brown is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nu Skin Enterprises and Brown Forman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Forman and Nu Skin 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 Nu Skin Enterprises are associated (or correlated) with Brown Forman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Forman has no effect on the direction of Nu Skin i.e., Nu Skin and Brown Forman go up and down completely randomly.
Pair Corralation between Nu Skin and Brown Forman
Considering the 90-day investment horizon Nu Skin Enterprises is expected to generate 2.8 times more return on investment than Brown Forman. However, Nu Skin is 2.8 times more volatile than Brown Forman. It trades about 0.01 of its potential returns per unit of risk. Brown Forman is currently generating about -0.13 per unit of risk. If you would invest 1,250 in Nu Skin Enterprises on January 25, 2024 and sell it today you would earn a total of 1.00 from holding Nu Skin Enterprises or generate 0.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nu Skin Enterprises vs. Brown Forman
Performance |
Timeline |
Nu Skin Enterprises |
Brown Forman |
Nu Skin and Brown Forman Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nu Skin and Brown Forman
The main advantage of trading using opposite Nu Skin and Brown Forman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Skin position performs unexpectedly, Brown Forman 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 Brown Forman will offset losses from the drop in Brown Forman's long position.Nu Skin vs. Herbalife Nutrition | Nu Skin vs. USANA Health Sciences | Nu Skin vs. Inter Parfums | Nu Skin vs. Flowers Foods |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |