Correlation Between FitLife Brands, and Hongli Group
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Hongli Group 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 Hongli Group 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 Hongli Group Ordinary, you can compare the effects of market volatilities on FitLife Brands, and Hongli Group 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 Hongli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Hongli Group.
Diversification Opportunities for FitLife Brands, and Hongli Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FitLife and Hongli is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Hongli Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongli Group Ordinary 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 Hongli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongli Group Ordinary has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Hongli Group go up and down completely randomly.
Pair Corralation between FitLife Brands, and Hongli Group
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 0.33 times more return on investment than Hongli Group. However, FitLife Brands, Common is 2.99 times less risky than Hongli Group. It trades about 0.06 of its potential returns per unit of risk. Hongli Group Ordinary is currently generating about 0.01 per unit of risk. If you would invest 1,650 in FitLife Brands, Common on September 12, 2024 and sell it today you would earn a total of 1,584 from holding FitLife Brands, Common or generate 96.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.22% |
| Values | Daily Returns |
FitLife Brands, Common vs. Hongli Group Ordinary
Performance |
| Timeline |
| FitLife Brands, Common |
| Hongli Group Ordinary |
FitLife Brands, and Hongli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Hongli Group
The main advantage of trading using opposite FitLife Brands, and Hongli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Hongli Group 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 Hongli Group will offset losses from the drop in Hongli Group's long position.| FitLife Brands, vs. Noble Romans | FitLife Brands, vs. Greystone Logistics | FitLife Brands, vs. Innovative Food Hldg | FitLife Brands, vs. Galaxy Gaming |
| Hongli Group vs. FitLife Brands, Common | Hongli Group vs. Hooker Furniture | Hongli Group vs. Where Food Comes | Hongli Group vs. National Beverage 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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