Correlation Between Colgate Palmolive and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Colgate Palmolive and Lifevantage 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 Colgate Palmolive and Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colgate Palmolive and Lifevantage, you can compare the effects of market volatilities on Colgate Palmolive and Lifevantage 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 Colgate Palmolive with a short position of Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colgate Palmolive and Lifevantage.
Diversification Opportunities for Colgate Palmolive and Lifevantage
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Colgate and Lifevantage is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Colgate Palmolive and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Colgate Palmolive 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 Colgate Palmolive are associated (or correlated) with Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Colgate Palmolive i.e., Colgate Palmolive and Lifevantage go up and down completely randomly.
Pair Corralation between Colgate Palmolive and Lifevantage
Allowing for the 90-day total investment horizon Colgate Palmolive is expected to generate 4.6 times less return on investment than Lifevantage. But when comparing it to its historical volatility, Colgate Palmolive is 3.97 times less risky than Lifevantage. It trades about 0.09 of its potential returns per unit of risk. Lifevantage is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Lifevantage on August 26, 2024 and sell it today you would earn a total of 798.00 from holding Lifevantage or generate 128.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Colgate Palmolive vs. Lifevantage
Performance |
| Timeline |
| Colgate Palmolive |
| Lifevantage |
Colgate Palmolive and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colgate Palmolive and Lifevantage
The main advantage of trading using opposite Colgate Palmolive and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colgate Palmolive position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| Colgate Palmolive vs. The Clorox | Colgate Palmolive vs. Procter Gamble | Colgate Palmolive vs. Unilever PLC ADR | Colgate Palmolive vs. Church Dwight |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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