Correlation Between Kenvue and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Kenvue and Lifevantage 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 Kenvue and Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenvue Inc and Lifevantage, you can compare the effects of market volatilities on Kenvue and Lifevantage 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 Kenvue with a short position of Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenvue and Lifevantage.
Diversification Opportunities for Kenvue and Lifevantage
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kenvue and Lifevantage is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kenvue Inc and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Kenvue 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 Kenvue Inc are associated (or correlated) with Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Kenvue i.e., Kenvue and Lifevantage go up and down completely randomly.
Pair Corralation between Kenvue and Lifevantage
Given the investment horizon of 90 days Kenvue is expected to generate 129.4 times less return on investment than Lifevantage. But when comparing it to its historical volatility, Kenvue Inc is 6.18 times less risky than Lifevantage. It trades about 0.01 of its potential returns per unit of risk. Lifevantage is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,766 in Lifevantage on November 3, 2024 and sell it today you would earn a total of 350.00 from holding Lifevantage or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenvue Inc vs. Lifevantage
Performance |
| Timeline |
| Kenvue Inc |
| Lifevantage |
Kenvue and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenvue and Lifevantage
The main advantage of trading using opposite Kenvue and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenvue position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.The idea behind Kenvue Inc and Lifevantage pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods | Lifevantage vs. Seneca Foods Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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