Correlation Between Lifevantage and Uranium Energy

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

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

Diversification Opportunities for Lifevantage and Uranium Energy

0.86

Correlation Coefficient

Lifevantage  Uranium Energy

Very poor diversification

The 3 months correlation between Lifevantage and Uranium is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Uranium Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uranium Energy Corp 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 Uranium Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uranium Energy Corp has no effect on the direction of Lifevantage i.e., Lifevantage and Uranium Energy go up and down completely randomly.

Pair Corralation between Lifevantage and Uranium Energy

Given the investment horizon of 90 days Lifevantage is expected to generate 1.15 times more return on investment than Uranium Energy. However, Lifevantage is 1.15 times more volatile than Uranium Energy Corp. It trades about 0.23 of its potential returns per unit of risk. Uranium Energy Corp is currently generating about 0.23 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.  Uranium Energy Corp

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.

Uranium Energy Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Uranium Energy Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Uranium Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifevantage and Uranium Energy

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

The idea behind Lifevantage and Uranium Energy Corp 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.