Correlation Between FitLife Brands, and Central Garden
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Central Garden 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 FitLife Brands, and Central Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FitLife Brands, Common and Central Garden Pet, you can compare the effects of market volatilities on FitLife Brands, and Central Garden 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 FitLife Brands, with a short position of Central Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Central Garden.
Diversification Opportunities for FitLife Brands, and Central Garden
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FitLife and Central is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Central Garden Pet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Garden Pet and FitLife Brands, 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 FitLife Brands, Common are associated (or correlated) with Central Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Garden Pet has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Central Garden go up and down completely randomly.
Pair Corralation between FitLife Brands, and Central Garden
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 1.44 times more return on investment than Central Garden. However, FitLife Brands, is 1.44 times more volatile than Central Garden Pet. It trades about 0.08 of its potential returns per unit of risk. Central Garden Pet is currently generating about 0.05 per unit of risk. If you would invest 1,600 in FitLife Brands, Common on August 31, 2024 and sell it today you would earn a total of 1,773 from holding FitLife Brands, Common or generate 110.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
FitLife Brands, Common vs. Central Garden Pet
Performance |
| Timeline |
| FitLife Brands, Common |
| Central Garden Pet |
FitLife Brands, and Central Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Central Garden
The main advantage of trading using opposite FitLife Brands, and Central Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Central Garden 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 Central Garden will offset losses from the drop in Central Garden's long position.| FitLife Brands, vs. Noble Romans | FitLife Brands, vs. Greystone Logistics | FitLife Brands, vs. Innovative Food Hldg | FitLife Brands, vs. Galaxy Gaming |
| Central Garden vs. Seneca Foods Corp | Central Garden vs. McCormick Company Incorporated | Central Garden vs. Natures Sunshine Products | Central Garden vs. Seneca Foods Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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