Correlation Between FitLife Brands, and 3M
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and 3M 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 3M 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 3M Company, you can compare the effects of market volatilities on FitLife Brands, and 3M 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 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and 3M.
Diversification Opportunities for FitLife Brands, and 3M
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FitLife and 3M is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company 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 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and 3M go up and down completely randomly.
Pair Corralation between FitLife Brands, and 3M
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 1.37 times more return on investment than 3M. However, FitLife Brands, is 1.37 times more volatile than 3M Company. It trades about 0.07 of its potential returns per unit of risk. 3M Company is currently generating about 0.04 per unit of risk. If you would invest 1,630 in FitLife Brands, Common on August 27, 2024 and sell it today you would earn a total of 1,600 from holding FitLife Brands, Common or generate 98.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
FitLife Brands, Common vs. 3M Company
Performance |
| Timeline |
| FitLife Brands, Common |
| 3M Company |
FitLife Brands, and 3M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and 3M
The main advantage of trading using opposite FitLife Brands, and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.| FitLife Brands, vs. Noble Romans | FitLife Brands, vs. Greystone Logistics | FitLife Brands, vs. Innovative Food Hldg | FitLife Brands, vs. Galaxy Gaming |
| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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