Correlation Between Lifevantage and John B

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

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

Diversification Opportunities for Lifevantage and John B

-0.6

Correlation Coefficient

Lifevantage  John B

Excellent diversification

The 3 months correlation between Lifevantage and John is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo and Lifevantage 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 Lifevantage are associated (or correlated) with John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Lifevantage i.e., Lifevantage and John B go up and down completely randomly.

Pair Corralation between Lifevantage and John B

Given the investment horizon of 90 days Lifevantage is expected to generate 2.7 times more return on investment than John B. However, Lifevantage is 2.7 times more volatile than John B Sanfilippo. It trades about 0.22 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.09 per unit of risk. If you would invest  793.00  in Lifevantage on August 30, 2024 and sell it today you would earn a total of  647.00  from holding Lifevantage or generate 81.59% return on investment over 90 days.

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

Lifevantage  vs.  John B Sanfilippo

Lifevantage

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Lifevantage displayed solid returns over the last few months and may actually be approaching a breakup point.

John B Sanfilippo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic 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 Lifevantage and John B

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

The idea behind Lifevantage and John B Sanfilippo 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.