Correlation Between FitLife Brands, and Natural Alternatives
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Natural Alternatives 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 Natural Alternatives 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 Natural Alternatives International, you can compare the effects of market volatilities on FitLife Brands, and Natural Alternatives 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 Natural Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Natural Alternatives.
Diversification Opportunities for FitLife Brands, and Natural Alternatives
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FitLife and Natural is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Natural Alternatives Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Alternatives 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 Natural Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Alternatives has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Natural Alternatives go up and down completely randomly.
Pair Corralation between FitLife Brands, and Natural Alternatives
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 0.94 times more return on investment than Natural Alternatives. However, FitLife Brands, Common is 1.07 times less risky than Natural Alternatives. It trades about 0.09 of its potential returns per unit of risk. Natural Alternatives International is currently generating about -0.05 per unit of risk. If you would invest 1,910 in FitLife Brands, Common on August 25, 2024 and sell it today you would earn a total of 1,320 from holding FitLife Brands, Common or generate 69.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FitLife Brands, Common vs. Natural Alternatives Internati
Performance |
| Timeline |
| FitLife Brands, Common |
| Natural Alternatives |
FitLife Brands, and Natural Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Natural Alternatives
The main advantage of trading using opposite FitLife Brands, and Natural Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Natural Alternatives 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 Natural Alternatives will offset losses from the drop in Natural Alternatives' long position.| FitLife Brands, vs. Honest Company | FitLife Brands, vs. Hims Hers Health | FitLife Brands, vs. Procter Gamble | FitLife Brands, vs. Kimberly Clark |
| Natural Alternatives vs. FitLife Brands, Common | Natural Alternatives vs. Lifeway Foods | Natural Alternatives vs. Else Nutrition Holdings | Natural Alternatives vs. Central Garden Pet |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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