Correlation Between Lifeist Wellness and Westaim Corp
Can any of the company-specific risk be diversified away by investing in both Lifeist Wellness and Westaim Corp 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 Westaim Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeist Wellness and Westaim Corp, you can compare the effects of market volatilities on Lifeist Wellness and Westaim Corp 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 Westaim Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeist Wellness and Westaim Corp.
Diversification Opportunities for Lifeist Wellness and Westaim Corp
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lifeist and Westaim is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lifeist Wellness and Westaim Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westaim Corp 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 Westaim Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westaim Corp has no effect on the direction of Lifeist Wellness i.e., Lifeist Wellness and Westaim Corp go up and down completely randomly.
Pair Corralation between Lifeist Wellness and Westaim Corp
Assuming the 90 days trading horizon Lifeist Wellness is expected to under-perform the Westaim Corp. In addition to that, Lifeist Wellness is 8.15 times more volatile than Westaim Corp. It trades about -0.16 of its total potential returns per unit of risk. Westaim Corp is currently generating about 0.31 per unit of volatility. If you would invest 462.00 in Westaim Corp on September 12, 2024 and sell it today you would earn a total of 62.00 from holding Westaim Corp or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeist Wellness vs. Westaim Corp
Performance |
| Timeline |
| Lifeist Wellness |
| Westaim Corp |
Lifeist Wellness and Westaim Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeist Wellness and Westaim Corp
The main advantage of trading using opposite Lifeist Wellness and Westaim Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeist Wellness position performs unexpectedly, Westaim Corp 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 Westaim Corp will offset losses from the drop in Westaim Corp'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 |
| Westaim Corp vs. Pulse Seismic | Westaim Corp vs. Quarterhill | Westaim Corp vs. Kneat Inc | Westaim Corp vs. Trisura Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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