Correlation Between FitLife Brands, and Yum Brands
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Yum Brands 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 Yum Brands 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 Yum Brands, you can compare the effects of market volatilities on FitLife Brands, and Yum Brands 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 Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Yum Brands.
Diversification Opportunities for FitLife Brands, and Yum Brands
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FitLife and Yum is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands 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 Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Yum Brands go up and down completely randomly.
Pair Corralation between FitLife Brands, and Yum Brands
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 2.87 times more return on investment than Yum Brands. However, FitLife Brands, is 2.87 times more volatile than Yum Brands. It trades about 0.11 of its potential returns per unit of risk. Yum Brands is currently generating about 0.23 per unit of risk. If you would invest 3,180 in FitLife Brands, Common on September 2, 2024 and sell it today you would earn a total of 193.00 from holding FitLife Brands, Common or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FitLife Brands, Common vs. Yum Brands
Performance |
| Timeline |
| FitLife Brands, Common |
| Yum Brands |
FitLife Brands, and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FitLife Brands, and Yum Brands
The main advantage of trading using opposite FitLife Brands, and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' long position.| FitLife Brands, vs. Seneca Foods Corp | FitLife Brands, vs. Central Garden Pet | FitLife Brands, vs. Central Garden Pet | FitLife Brands, vs. Lifeway Foods |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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