Correlation Between Lifecore Biomedical and Prestige Brand
Can any of the company-specific risk be diversified away by investing in both Lifecore Biomedical and Prestige Brand 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 Lifecore Biomedical and Prestige Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifecore Biomedical and Prestige Brand Holdings, you can compare the effects of market volatilities on Lifecore Biomedical and Prestige Brand 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 Lifecore Biomedical with a short position of Prestige Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifecore Biomedical and Prestige Brand.
Diversification Opportunities for Lifecore Biomedical and Prestige Brand
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lifecore and Prestige is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and Prestige Brand Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Brand Holdings and Lifecore Biomedical 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 Lifecore Biomedical are associated (or correlated) with Prestige Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Brand Holdings has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and Prestige Brand go up and down completely randomly.
Pair Corralation between Lifecore Biomedical and Prestige Brand
Given the investment horizon of 90 days Lifecore Biomedical is expected to under-perform the Prestige Brand. In addition to that, Lifecore Biomedical is 5.5 times more volatile than Prestige Brand Holdings. It trades about -0.03 of its total potential returns per unit of risk. Prestige Brand Holdings is currently generating about 0.01 per unit of volatility. If you would invest 7,856 in Prestige Brand Holdings on October 24, 2024 and sell it today you would earn a total of 2.00 from holding Prestige Brand Holdings or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifecore Biomedical vs. Prestige Brand Holdings
Performance |
| Timeline |
| Lifecore Biomedical |
| Prestige Brand Holdings |
Lifecore Biomedical and Prestige Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifecore Biomedical and Prestige Brand
The main advantage of trading using opposite Lifecore Biomedical and Prestige Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifecore Biomedical position performs unexpectedly, Prestige Brand 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 Prestige Brand will offset losses from the drop in Prestige Brand's long position.| Lifecore Biomedical vs. Shuttle Pharmaceuticals | Lifecore Biomedical vs. Tilray Inc | Lifecore Biomedical vs. Kamada | Lifecore Biomedical vs. Cumberland Pharmaceuticals |
| Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Regencell Bioscience Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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