Correlation Between Coty and FitLife Brands,
Can any of the company-specific risk be diversified away by investing in both Coty and FitLife Brands, 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 Coty and FitLife Brands, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coty Inc and FitLife Brands, Common, you can compare the effects of market volatilities on Coty and FitLife Brands, 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 Coty with a short position of FitLife Brands,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and FitLife Brands,.
Diversification Opportunities for Coty and FitLife Brands,
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coty and FitLife is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and FitLife Brands, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FitLife Brands, Common and Coty 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 Coty Inc are associated (or correlated) with FitLife Brands,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FitLife Brands, Common has no effect on the direction of Coty i.e., Coty and FitLife Brands, go up and down completely randomly.
Pair Corralation between Coty and FitLife Brands,
Given the investment horizon of 90 days Coty Inc is expected to under-perform the FitLife Brands,. But the stock apears to be less risky and, when comparing its historical volatility, Coty Inc is 1.43 times less risky than FitLife Brands,. The stock trades about -0.03 of its potential returns per unit of risk. The FitLife Brands, Common is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,245 in FitLife Brands, Common on August 25, 2024 and sell it today you would earn a total of 985.00 from holding FitLife Brands, Common or generate 43.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coty Inc vs. FitLife Brands, Common
Performance |
| Timeline |
| Coty Inc |
| FitLife Brands, Common |
Coty and FitLife Brands, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and FitLife Brands,
The main advantage of trading using opposite Coty and FitLife Brands, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty position performs unexpectedly, FitLife Brands, 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 FitLife Brands, will offset losses from the drop in FitLife Brands,'s long position.The idea behind Coty Inc and FitLife Brands, Common 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.| FitLife Brands, vs. Honest Company | FitLife Brands, vs. Hims Hers Health | FitLife Brands, vs. Procter Gamble | FitLife Brands, vs. Coty Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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