Correlation Between FitLife Brands, and Summit Materials
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Summit Materials 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 Summit Materials 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 Summit Materials, you can compare the effects of market volatilities on FitLife Brands, and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Summit Materials.
Diversification Opportunities for FitLife Brands, and Summit Materials
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FitLife and Summit is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Summit Materials go up and down completely randomly.
Pair Corralation between FitLife Brands, and Summit Materials
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 1.28 times more return on investment than Summit Materials. However, FitLife Brands, is 1.28 times more volatile than Summit Materials. It trades about 0.06 of its potential returns per unit of risk. Summit Materials is currently generating about 0.06 per unit of risk. If you would invest 1,700 in FitLife Brands, Common on August 29, 2024 and sell it today you would earn a total of 1,661 from holding FitLife Brands, Common or generate 97.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
FitLife Brands, Common vs. Summit Materials
Performance |
| Timeline |
| FitLife Brands, Common |
| Summit Materials |
FitLife Brands, and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Summit Materials
The main advantage of trading using opposite FitLife Brands, and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| FitLife Brands, vs. Kellanova | FitLife Brands, vs. Lamb Weston Holdings | FitLife Brands, vs. Borealis Foods | FitLife Brands, vs. Central Garden Pet |
| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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