Correlation Between FitLife Brands, and Rocky Brands
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Rocky Brands 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 Rocky Brands 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 Rocky Brands, you can compare the effects of market volatilities on FitLife Brands, and Rocky Brands 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 Rocky Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Rocky Brands.
Diversification Opportunities for FitLife Brands, and Rocky Brands
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FitLife and Rocky is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Rocky Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Brands 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 Rocky Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Brands has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Rocky Brands go up and down completely randomly.
Pair Corralation between FitLife Brands, and Rocky Brands
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 0.43 times more return on investment than Rocky Brands. However, FitLife Brands, Common is 2.32 times less risky than Rocky Brands. It trades about 0.07 of its potential returns per unit of risk. Rocky Brands is currently generating about -0.11 per unit of risk. If you would invest 3,125 in FitLife Brands, Common on August 27, 2024 and sell it today you would earn a total of 105.00 from holding FitLife Brands, Common or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FitLife Brands, Common vs. Rocky Brands
Performance |
| Timeline |
| FitLife Brands, Common |
| Rocky Brands |
FitLife Brands, and Rocky Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Rocky Brands
The main advantage of trading using opposite FitLife Brands, and Rocky Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Rocky Brands 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 Rocky Brands will offset losses from the drop in Rocky Brands' long position.| FitLife Brands, vs. Noble Romans | FitLife Brands, vs. Greystone Logistics | FitLife Brands, vs. Innovative Food Hldg | FitLife Brands, vs. Galaxy Gaming |
| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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