Correlation Between FitLife Brands, and Wendys
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Wendys 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 Wendys 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 The Wendys Co, you can compare the effects of market volatilities on FitLife Brands, and Wendys 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 Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Wendys.
Diversification Opportunities for FitLife Brands, and Wendys
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FitLife and Wendys is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Wendys go up and down completely randomly.
Pair Corralation between FitLife Brands, and Wendys
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 1.36 times more return on investment than Wendys. However, FitLife Brands, is 1.36 times more volatile than The Wendys Co. It trades about 0.13 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.19 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 236.00 from holding FitLife Brands, Common or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FitLife Brands, Common vs. The Wendys Co
Performance |
| Timeline |
| FitLife Brands, Common |
| The Wendys |
FitLife Brands, and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Wendys
The main advantage of trading using opposite FitLife Brands, and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| FitLife Brands, vs. Kellanova | FitLife Brands, vs. Lamb Weston Holdings | FitLife Brands, vs. Borealis Foods | FitLife Brands, vs. Central Garden Pet |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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