Correlation Between LifeMD Preferred and Star Equity
Can any of the company-specific risk be diversified away by investing in both LifeMD Preferred and Star Equity 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 Star Equity 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 Star Equity Holdings, you can compare the effects of market volatilities on LifeMD Preferred and Star Equity 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 Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifeMD Preferred and Star Equity.
Diversification Opportunities for LifeMD Preferred and Star Equity
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LifeMD and Star is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding LifeMD Preferred Series and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings 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 Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of LifeMD Preferred i.e., LifeMD Preferred and Star Equity go up and down completely randomly.
Pair Corralation between LifeMD Preferred and Star Equity
Assuming the 90 days horizon LifeMD Preferred Series is expected to generate 0.52 times more return on investment than Star Equity. However, LifeMD Preferred Series is 1.93 times less risky than Star Equity. It trades about 0.1 of its potential returns per unit of risk. Star Equity Holdings is currently generating about 0.03 per unit of risk. If you would invest 1,102 in LifeMD Preferred Series on August 27, 2024 and sell it today you would earn a total of 1,113 from holding LifeMD Preferred Series or generate 101.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LifeMD Preferred Series vs. Star Equity Holdings
Performance |
| Timeline |
| LifeMD Preferred Series |
| Star Equity Holdings |
LifeMD Preferred and Star Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LifeMD Preferred and Star Equity
The main advantage of trading using opposite LifeMD Preferred and Star Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LifeMD Preferred position performs unexpectedly, Star Equity 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 Star Equity will offset losses from the drop in Star Equity'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 |
| Star Equity vs. Star Equity Holdings | Star Equity vs. XOMA Corp | Star Equity vs. Fundamental Global | Star Equity vs. Fortress Biotech Pref |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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