Correlation Between Lifevantage and BTC Digital
Can any of the company-specific risk be diversified away by investing in both Lifevantage and BTC Digital 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 Lifevantage and BTC Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifevantage and BTC Digital, you can compare the effects of market volatilities on Lifevantage and BTC Digital 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 Lifevantage with a short position of BTC Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and BTC Digital.
Diversification Opportunities for Lifevantage and BTC Digital
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifevantage and BTC is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and BTC Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Digital and Lifevantage 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 Lifevantage are associated (or correlated) with BTC Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Digital has no effect on the direction of Lifevantage i.e., Lifevantage and BTC Digital go up and down completely randomly.
Pair Corralation between Lifevantage and BTC Digital
Given the investment horizon of 90 days Lifevantage is expected to generate 2.35 times less return on investment than BTC Digital. But when comparing it to its historical volatility, Lifevantage is 3.8 times less risky than BTC Digital. It trades about 0.09 of its potential returns per unit of risk. BTC Digital is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 500.00 in BTC Digital on August 24, 2024 and sell it today you would earn a total of 1,170 from holding BTC Digital or generate 234.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifevantage vs. BTC Digital
Performance |
| Timeline |
| Lifevantage |
| BTC Digital |
Lifevantage and BTC Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifevantage and BTC Digital
The main advantage of trading using opposite Lifevantage and BTC Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, BTC Digital 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 BTC Digital will offset losses from the drop in BTC Digital's long position.| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Associated British Foods |
| BTC Digital vs. Lifevantage | BTC Digital vs. Balchem | BTC Digital vs. Western Acquisition Ventures | BTC Digital vs. CF Industries 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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