Correlation Between LifeMD Preferred and Sparta Capital
Can any of the company-specific risk be diversified away by investing in both LifeMD Preferred and Sparta Capital 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 LifeMD Preferred and Sparta Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LifeMD Preferred Series and Sparta Capital, you can compare the effects of market volatilities on LifeMD Preferred and Sparta Capital 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 LifeMD Preferred with a short position of Sparta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifeMD Preferred and Sparta Capital.
Diversification Opportunities for LifeMD Preferred and Sparta Capital
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LifeMD and Sparta is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding LifeMD Preferred Series and Sparta Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta Capital and LifeMD Preferred 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 LifeMD Preferred Series are associated (or correlated) with Sparta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparta Capital has no effect on the direction of LifeMD Preferred i.e., LifeMD Preferred and Sparta Capital go up and down completely randomly.
Pair Corralation between LifeMD Preferred and Sparta Capital
Assuming the 90 days horizon LifeMD Preferred Series is expected to generate 0.33 times more return on investment than Sparta Capital. However, LifeMD Preferred Series is 3.06 times less risky than Sparta Capital. It trades about 0.07 of its potential returns per unit of risk. Sparta Capital is currently generating about -0.21 per unit of risk. If you would invest 2,214 in LifeMD Preferred Series on August 30, 2024 and sell it today you would earn a total of 56.00 from holding LifeMD Preferred Series or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LifeMD Preferred Series vs. Sparta Capital
Performance |
| Timeline |
| LifeMD Preferred Series |
| Sparta Capital |
LifeMD Preferred and Sparta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LifeMD Preferred and Sparta Capital
The main advantage of trading using opposite LifeMD Preferred and Sparta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LifeMD Preferred position performs unexpectedly, Sparta Capital 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 Sparta Capital will offset losses from the drop in Sparta Capital's long position.| LifeMD Preferred vs. Cadiz Depositary Shares | LifeMD Preferred vs. Star Equity Holdings | LifeMD Preferred vs. FAT Brands | LifeMD Preferred vs. Fortress Biotech Pref |
| Sparta Capital vs. Zurn Elkay Water | Sparta Capital vs. Federal Signal | Sparta Capital vs. Energy Recovery | Sparta Capital vs. CECO Environmental 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |