Correlation Between ATRenew and Mannatech Incorporated

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

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

Diversification Opportunities for ATRenew and Mannatech Incorporated

-0.51

Correlation Coefficient

ATRenew  Mannatech Incorporated

Excellent diversification

The 3 months correlation between ATRenew and Mannatech is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated and ATRenew 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 ATRenew Inc DRC 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 ATRenew i.e., ATRenew and Mannatech Incorporated go up and down completely randomly.

Pair Corralation between ATRenew and Mannatech Incorporated

Given the investment horizon of 90 days ATRenew Inc DRC is expected to generate 1.31 times more return on investment than Mannatech Incorporated. However, ATRenew is 1.31 times more volatile than Mannatech Incorporated. It trades about 0.0 of its potential returns per unit of risk. Mannatech Incorporated is currently generating about -0.05 per unit of risk. If you would invest  269.00  in ATRenew Inc DRC on January 29, 2024 and sell it today you would lose (71.00) from holding ATRenew Inc DRC or give up 26.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.1%
Values	Daily Returns

ATRenew Inc DRC  vs.  Mannatech Incorporated

ATRenew Inc DRC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ATRenew exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ATRenew and Mannatech Incorporated

The main advantage of trading using opposite ATRenew and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRenew 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 ATRenew Inc DRC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.