Correlation Between FitLife Brands, and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Western Acquisition 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 Western Acquisition 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 Western Acquisition Ventures, you can compare the effects of market volatilities on FitLife Brands, and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Western Acquisition.
Diversification Opportunities for FitLife Brands, and Western Acquisition
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FitLife and Western is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Western Acquisition go up and down completely randomly.
Pair Corralation between FitLife Brands, and Western Acquisition
Given the investment horizon of 90 days FitLife Brands, Common is expected to under-perform the Western Acquisition. In addition to that, FitLife Brands, is 3.25 times more volatile than Western Acquisition Ventures. It trades about -0.13 of its total potential returns per unit of risk. Western Acquisition Ventures is currently generating about -0.21 per unit of volatility. If you would invest 1,105 in Western Acquisition Ventures on September 25, 2024 and sell it today you would lose (30.00) from holding Western Acquisition Ventures or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FitLife Brands, Common vs. Western Acquisition Ventures
Performance |
| Timeline |
| FitLife Brands, Common |
| Western Acquisition |
FitLife Brands, and Western Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Western Acquisition
The main advantage of trading using opposite FitLife Brands, and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition's long position.| FitLife Brands, vs. Kimberly Clark | FitLife Brands, vs. Colgate Palmolive | FitLife Brands, vs. Procter Gamble | FitLife Brands, vs. The Clorox |
| Western Acquisition vs. Aquagold International | Western Acquisition vs. Morningstar Unconstrained Allocation | Western Acquisition vs. Thrivent High Yield | Western Acquisition vs. Via Renewables |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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