Correlation Between Mannatech Incorporated and Treehouse Foods

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

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

Diversification Opportunities for Mannatech Incorporated and Treehouse Foods

0.67

Correlation Coefficient

Mannatech Incorporated  Treehouse Foods

Poor diversification

The 3 months correlation between Mannatech and Treehouse is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mannatech Incorporated and Treehouse Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treehouse Foods 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 Treehouse Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treehouse Foods has no effect on the direction of Mannatech Incorporated i.e., Mannatech Incorporated and Treehouse Foods go up and down completely randomly.

Pair Corralation between Mannatech Incorporated and Treehouse Foods

Given the investment horizon of 90 days Mannatech Incorporated is expected to generate 1.99 times more return on investment than Treehouse Foods. However, Mannatech Incorporated is 1.99 times more volatile than Treehouse Foods. It trades about 0.0 of its potential returns per unit of risk. Treehouse Foods is currently generating about -0.06 per unit of risk. If you would invest  1,045  in Mannatech Incorporated on May 1, 2025 and sell it today you would lose (101.00) from holding Mannatech Incorporated or give up 9.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Mannatech Incorporated  vs.  Treehouse Foods

Mannatech Incorporated

Risk-Adjusted Performance

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 fairly strong technical and fundamental indicators, Mannatech Incorporated is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Treehouse Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treehouse Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mannatech Incorporated and Treehouse Foods

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

The idea behind Mannatech Incorporated and Treehouse Foods 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.