Correlation Between Park Ha and Natures Sunshine

Can any of the company-specific risk be diversified away by investing in both Park Ha and Natures Sunshine 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 Park Ha and Natures Sunshine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Park Ha Biological and Natures Sunshine Products, you can compare the effects of market volatilities on Park Ha and Natures Sunshine 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 Park Ha with a short position of Natures Sunshine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ha and Natures Sunshine.

Diversification Opportunities for Park Ha and Natures Sunshine

-0.26

Correlation Coefficient

Park Ha  Natures Sunshine

Very good diversification

The 3 months correlation between Park and Natures is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Park Ha Biological and Natures Sunshine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Sunshine Products and Park Ha 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 Park Ha Biological are associated (or correlated) with Natures Sunshine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Sunshine Products has no effect on the direction of Park Ha i.e., Park Ha and Natures Sunshine go up and down completely randomly.

Pair Corralation between Park Ha and Natures Sunshine

Considering the 90-day investment horizon Park Ha Biological is expected to generate 3.25 times more return on investment than Natures Sunshine. However, Park Ha is 3.25 times more volatile than Natures Sunshine Products. It trades about 0.21 of its potential returns per unit of risk. Natures Sunshine Products is currently generating about 0.06 per unit of risk. If you would invest  550.00  in Park Ha Biological on March 4, 2025 and sell it today you would earn a total of  859.00  from holding Park Ha Biological or generate 156.18% return on investment over 90 days.

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

Park Ha Biological  vs.  Natures Sunshine Products

Park Ha Biological

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Park Ha Biological are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Park Ha demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Natures Sunshine Products

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Natures Sunshine Products are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Natures Sunshine may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Park Ha and Natures Sunshine

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

The idea behind Park Ha Biological and Natures Sunshine Products 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 Transaction History module to view history of all your transactions and understand their impact on performance.