Correlation Between Herbalife Nutrition and USANA Health

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

By analyzing existing cross correlation between Herbalife Nutrition and USANA Health Sciences, you can compare the effects of market volatilities on Herbalife Nutrition and USANA Health 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 Herbalife Nutrition with a short position of USANA Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herbalife Nutrition and USANA Health.

Diversification Opportunities for Herbalife Nutrition and USANA Health

-0.47

Correlation Coefficient

Herbalife Nutrition  USANA Health

Very good diversification

The 3 months correlation between Herbalife and USANA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Herbalife Nutrition and USANA Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USANA Health Sciences and Herbalife Nutrition 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 Herbalife Nutrition are associated (or correlated) with USANA Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USANA Health Sciences has no effect on the direction of Herbalife Nutrition i.e., Herbalife Nutrition and USANA Health go up and down completely randomly.

Pair Corralation between Herbalife Nutrition and USANA Health

Considering the 90-day investment horizon Herbalife Nutrition is expected to generate 2.11 times more return on investment than USANA Health. However, Herbalife Nutrition is 2.11 times more volatile than USANA Health Sciences. It trades about 0.06 of its potential returns per unit of risk. USANA Health Sciences is currently generating about -0.15 per unit of risk. If you would invest  646.00  in Herbalife Nutrition on January 11, 2025 and sell it today you would earn a total of  88.00  from holding Herbalife Nutrition or generate 13.62% return on investment over 90 days.

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

Herbalife Nutrition  vs.  USANA Health Sciences

Herbalife Nutrition

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Herbalife Nutrition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady essential indicators, Herbalife Nutrition reported solid returns over the last few months and may actually be approaching a breakup point.

USANA Health Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days USANA Health Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Herbalife Nutrition and USANA Health

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

The idea behind Herbalife Nutrition and USANA Health Sciences 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.