Correlation Between Healixa and LifeMD Preferred

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

By analyzing existing cross correlation between Healixa and LifeMD Preferred Series, you can compare the effects of market volatilities on Healixa and LifeMD Preferred 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 Healixa with a short position of LifeMD Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healixa and LifeMD Preferred.

Diversification Opportunities for Healixa and LifeMD Preferred

-0.52

Correlation Coefficient

Healixa  LifeMD Preferred

Excellent diversification

The 3 months correlation between Healixa and LifeMD is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Healixa and LifeMD Preferred Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeMD Preferred Series and Healixa 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 Healixa are associated (or correlated) with LifeMD Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeMD Preferred Series has no effect on the direction of Healixa i.e., Healixa and LifeMD Preferred go up and down completely randomly.

Pair Corralation between Healixa and LifeMD Preferred

Given the investment horizon of 90 days Healixa is expected to generate 9.85 times more return on investment than LifeMD Preferred. However, Healixa is 9.85 times more volatile than LifeMD Preferred Series. It trades about 0.08 of its potential returns per unit of risk. LifeMD Preferred Series is currently generating about -0.04 per unit of risk. If you would invest  6.00  in Healixa on September 18, 2024 and sell it today you would earn a total of  0.31  from holding Healixa or generate 5.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Healixa  vs.  LifeMD Preferred Series

Healixa

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Healixa are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Healixa reported solid returns over the last few months and may actually be approaching a breakup point.

LifeMD Preferred Series

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LifeMD Preferred Series are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, LifeMD Preferred is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Healixa and LifeMD Preferred

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

The idea behind Healixa and LifeMD Preferred Series 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 Global Correlations module to find global opportunities by holding instruments from different markets.