Correlation Between FitLife Brands, and Sodexo PK
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Sodexo PK 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 Sodexo PK 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 Sodexo PK, you can compare the effects of market volatilities on FitLife Brands, and Sodexo PK 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 Sodexo PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Sodexo PK.
Diversification Opportunities for FitLife Brands, and Sodexo PK
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between FitLife and Sodexo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Sodexo PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sodexo PK 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 Sodexo PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sodexo PK has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Sodexo PK go up and down completely randomly.
Pair Corralation between FitLife Brands, and Sodexo PK
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 2.5 times more return on investment than Sodexo PK. However, FitLife Brands, is 2.5 times more volatile than Sodexo PK. It trades about 0.15 of its potential returns per unit of risk. Sodexo PK is currently generating about -0.16 per unit of risk. If you would invest 3,125 in FitLife Brands, Common on August 29, 2024 and sell it today you would earn a total of 285.00 from holding FitLife Brands, Common or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FitLife Brands, Common vs. Sodexo PK
Performance |
| Timeline |
| FitLife Brands, Common |
| Sodexo PK |
FitLife Brands, and Sodexo PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Sodexo PK
The main advantage of trading using opposite FitLife Brands, and Sodexo PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Sodexo PK 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 Sodexo PK will offset losses from the drop in Sodexo PK's long position.| FitLife Brands, vs. Hims Hers Health | FitLife Brands, vs. Procter Gamble | FitLife Brands, vs. Kimberly Clark | FitLife Brands, vs. Colgate Palmolive |
| Sodexo PK vs. FitLife Brands, Common | Sodexo PK vs. HUMANA INC | Sodexo PK vs. SCOR PK | Sodexo PK vs. Aquagold International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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