Correlation Between FitLife Brands, and SunOpta

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

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

Diversification Opportunities for FitLife Brands, and SunOpta

0.3

Correlation Coefficient

FitLife Brands,  SunOpta

Weak diversification

The 3 months correlation between FitLife and SunOpta is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and FitLife Brands, 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 FitLife Brands, Common are associated (or correlated) with SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and SunOpta go up and down completely randomly.

Pair Corralation between FitLife Brands, and SunOpta

Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 1.9 times more return on investment than SunOpta. However, FitLife Brands, is 1.9 times more volatile than SunOpta. It trades about 0.27 of its potential returns per unit of risk. SunOpta is currently generating about 0.24 per unit of risk. If you would invest  3,036  in FitLife Brands, Common on September 17, 2024 and sell it today you would earn a total of  364.00  from holding FitLife Brands, Common or generate 11.99% return on investment over 90 days.

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

FitLife Brands, Common  vs.  SunOpta

FitLife Brands, Common

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FitLife Brands, Common are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

SunOpta

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile forward-looking signals, SunOpta disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FitLife Brands, and SunOpta

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

The idea behind FitLife Brands, Common and SunOpta 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.