Correlation Between Lifevantage and 06050WFE0

Can any of the company-specific risk be diversified away by investing in both Lifevantage and 06050WFE0 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 06050WFE0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lifevantage and BANK AMER P, you can compare the effects of market volatilities on Lifevantage and 06050WFE0 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 06050WFE0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and 06050WFE0.

Diversification Opportunities for Lifevantage and 06050WFE0

0.36

Correlation Coefficient

Lifevantage  06050WFE0

Weak diversification

The 3 months correlation between Lifevantage and 06050WFE0 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and BANK AMER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK AMER P 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 06050WFE0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK AMER P has no effect on the direction of Lifevantage i.e., Lifevantage and 06050WFE0 go up and down completely randomly.

Pair Corralation between Lifevantage and 06050WFE0

Given the investment horizon of 90 days Lifevantage is expected to generate 1.96 times more return on investment than 06050WFE0. However, Lifevantage is 1.96 times more volatile than BANK AMER P. It trades about 0.2 of its potential returns per unit of risk. BANK AMER P is currently generating about -0.15 per unit of risk. If you would invest  894.00  in Lifevantage on September 5, 2024 and sell it today you would earn a total of  590.00  from holding Lifevantage or generate 66.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	39.06%
Values	Daily Returns

Lifevantage  vs.  BANK AMER P

Lifevantage

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 15 (%) 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.

BANK AMER P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK AMER P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for BANK AMER P investors.

Pair Trading with Lifevantage and 06050WFE0

The main advantage of trading using opposite Lifevantage and 06050WFE0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, 06050WFE0 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 06050WFE0 will offset losses from the drop in 06050WFE0's long position.

The idea behind Lifevantage and BANK AMER P 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.