Correlation Between FitLife Brands, and Eastern
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on FitLife Brands, and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Eastern.
Diversification Opportunities for FitLife Brands, and Eastern
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FitLife and Eastern is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Eastern go up and down completely randomly.
Pair Corralation between FitLife Brands, and Eastern
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 1.82 times more return on investment than Eastern. However, FitLife Brands, is 1.82 times more volatile than Eastern Co. It trades about -0.16 of its potential returns per unit of risk. Eastern Co is currently generating about -0.32 per unit of risk. If you would invest 1,390 in FitLife Brands, Common on January 11, 2025 and sell it today you would lose (227.00) from holding FitLife Brands, Common or give up 16.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FitLife Brands, Common vs. Eastern Co
Performance |
| Timeline |
| FitLife Brands, Common |
| Eastern |
FitLife Brands, and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Eastern
The main advantage of trading using opposite FitLife Brands, and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| FitLife Brands, vs. Noble Romans | FitLife Brands, vs. Greystone Logistics | FitLife Brands, vs. Innovative Food Hldg | FitLife Brands, vs. Galaxy Gaming |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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