Correlation Between Lifeist Wellness and Gildan Activewear
Can any of the company-specific risk be diversified away by investing in both Lifeist Wellness and Gildan Activewear 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 Lifeist Wellness and Gildan Activewear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeist Wellness and Gildan Activewear, you can compare the effects of market volatilities on Lifeist Wellness and Gildan Activewear 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 Lifeist Wellness with a short position of Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeist Wellness and Gildan Activewear.
Diversification Opportunities for Lifeist Wellness and Gildan Activewear
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lifeist and Gildan is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lifeist Wellness and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and Lifeist Wellness 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 Lifeist Wellness are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Lifeist Wellness i.e., Lifeist Wellness and Gildan Activewear go up and down completely randomly.
Pair Corralation between Lifeist Wellness and Gildan Activewear
Assuming the 90 days trading horizon Lifeist Wellness is expected to under-perform the Gildan Activewear. In addition to that, Lifeist Wellness is 10.81 times more volatile than Gildan Activewear. It trades about -0.04 of its total potential returns per unit of risk. Gildan Activewear is currently generating about 0.15 per unit of volatility. If you would invest 6,754 in Gildan Activewear on September 12, 2024 and sell it today you would earn a total of 163.00 from holding Gildan Activewear or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lifeist Wellness vs. Gildan Activewear
Performance |
| Timeline |
| Lifeist Wellness |
| Gildan Activewear |
Lifeist Wellness and Gildan Activewear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeist Wellness and Gildan Activewear
The main advantage of trading using opposite Lifeist Wellness and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeist Wellness position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.| Lifeist Wellness vs. Auxly Cannabis Group | Lifeist Wellness vs. Entourage Health Corp | Lifeist Wellness vs. Tilray Inc | Lifeist Wellness vs. Medipharm Labs Corp |
| Gildan Activewear vs. Apple Inc CDR | Gildan Activewear vs. NVIDIA CDR | Gildan Activewear vs. Microsoft Corp CDR | Gildan Activewear vs. Amazon CDR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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