Correlation Between EGIS and LYFE
Can any of the company-specific risk be diversified away by investing in both EGIS and LYFE 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 EGIS and LYFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EGIS and LYFE, you can compare the effects of market volatilities on EGIS and LYFE 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 EGIS with a short position of LYFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGIS and LYFE.
Diversification Opportunities for EGIS and LYFE
Pay attention - limited upside
The 3 months correlation between EGIS and LYFE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EGIS and LYFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYFE and EGIS 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 EGIS are associated (or correlated) with LYFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYFE has no effect on the direction of EGIS i.e., EGIS and LYFE go up and down completely randomly.
Pair Corralation between EGIS and LYFE
Given the investment horizon of 90 days EGIS is expected to generate 1.14 times less return on investment than LYFE. But when comparing it to its historical volatility, EGIS is 1.08 times less risky than LYFE. It trades about 0.08 of its potential returns per unit of risk. LYFE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,044 in LYFE on September 3, 2024 and sell it today you would earn a total of 359.00 from holding LYFE or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EGIS vs. LYFE
Performance |
| Timeline |
| EGIS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LYFE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EGIS and LYFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGIS and LYFE
The main advantage of trading using opposite EGIS and LYFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGIS position performs unexpectedly, LYFE 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 LYFE will offset losses from the drop in LYFE's long position.| EGIS vs. ETF Opportunities Trust | EGIS vs. Point Bridge GOP | EGIS vs. EA Series Trust | EGIS vs. EA Series Trust |
| LYFE vs. ETF Opportunities Trust | LYFE vs. Point Bridge GOP | LYFE vs. EA Series Trust | LYFE vs. EA Series Trust |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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