Correlation Between FitLife Brands, and CleanCore Solutions

Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and CleanCore Solutions 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 CleanCore Solutions 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 CleanCore Solutions, you can compare the effects of market volatilities on FitLife Brands, and CleanCore Solutions 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 CleanCore Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and CleanCore Solutions.

Diversification Opportunities for FitLife Brands, and CleanCore Solutions

0.19

Correlation Coefficient

FitLife Brands,  CleanCore Solutions

Average diversification

The 3 months correlation between FitLife and CleanCore is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and CleanCore Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanCore Solutions 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 CleanCore Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanCore Solutions has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and CleanCore Solutions go up and down completely randomly.

Pair Corralation between FitLife Brands, and CleanCore Solutions

Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 0.24 times more return on investment than CleanCore Solutions. However, FitLife Brands, Common is 4.1 times less risky than CleanCore Solutions. It trades about -0.13 of its potential returns per unit of risk. CleanCore Solutions is currently generating about -0.1 per unit of risk. If you would invest  3,412  in FitLife Brands, Common on September 25, 2024 and sell it today you would lose (205.00) from holding FitLife Brands, Common or give up 6.01% of portfolio value over 90 days.

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

FitLife Brands, Common  vs.  CleanCore Solutions

FitLife Brands, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FitLife Brands, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CleanCore Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CleanCore Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CleanCore Solutions is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FitLife Brands, and CleanCore Solutions

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

The idea behind FitLife Brands, Common and CleanCore Solutions 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.