Correlation Between FitLife Brands, and Transat AT
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Transat AT 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 Transat AT 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 Transat AT, you can compare the effects of market volatilities on FitLife Brands, and Transat AT 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 Transat AT. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Transat AT.
Diversification Opportunities for FitLife Brands, and Transat AT
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FitLife and Transat is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Transat AT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transat AT 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 Transat AT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transat AT has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Transat AT go up and down completely randomly.
Pair Corralation between FitLife Brands, and Transat AT
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 1.04 times more return on investment than Transat AT. However, FitLife Brands, is 1.04 times more volatile than Transat AT. It trades about 0.07 of its potential returns per unit of risk. Transat AT is currently generating about -0.04 per unit of risk. If you would invest 1,720 in FitLife Brands, Common on August 31, 2024 and sell it today you would earn a total of 1,641 from holding FitLife Brands, Common or generate 95.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
FitLife Brands, Common vs. Transat AT
Performance |
| Timeline |
| FitLife Brands, Common |
| Transat AT |
FitLife Brands, and Transat AT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Transat AT
The main advantage of trading using opposite FitLife Brands, and Transat AT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Transat AT 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 Transat AT will offset losses from the drop in Transat AT's long position.| FitLife Brands, vs. Noble Romans | FitLife Brands, vs. Greystone Logistics | FitLife Brands, vs. Innovative Food Hldg | FitLife Brands, vs. Galaxy Gaming |
| Transat AT vs. Porsche Automobile Holding | Transat AT vs. Ferrari NV | Transat AT vs. Toyota Motor | Transat AT vs. General Motors |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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