Correlation Between Lifevantage and Snap On

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

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

Diversification Opportunities for Lifevantage and Snap On

0.82

Correlation Coefficient

Lifevantage  Snap On

Very poor diversification

The 3 months correlation between Lifevantage and Snap is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Snap On in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap On 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 Snap On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap On has no effect on the direction of Lifevantage i.e., Lifevantage and Snap On go up and down completely randomly.

Pair Corralation between Lifevantage and Snap On

Given the investment horizon of 90 days Lifevantage is expected to generate 2.87 times more return on investment than Snap On. However, Lifevantage is 2.87 times more volatile than Snap On. It trades about 0.23 of its potential returns per unit of risk. Snap On is currently generating about 0.28 per unit of risk. If you would invest  768.00  in Lifevantage on September 3, 2024 and sell it today you would earn a total of  693.00  from holding Lifevantage or generate 90.23% return on investment over 90 days.

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

Lifevantage  vs.  Snap On

Lifevantage

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 18 (%) 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.

Snap On

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Snap On are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Snap On sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifevantage and Snap On

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

The idea behind Lifevantage and Snap On 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 CEOs Directory module to screen CEOs from public companies around the world.