Correlation Between Lifevantage and Legato Merger
Can any of the company-specific risk be diversified away by investing in both Lifevantage and Legato Merger 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 Legato Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifevantage and Legato Merger II, you can compare the effects of market volatilities on Lifevantage and Legato Merger 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 Legato Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and Legato Merger.
Diversification Opportunities for Lifevantage and Legato Merger
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lifevantage and Legato is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Legato Merger II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legato Merger II 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 Legato Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legato Merger II has no effect on the direction of Lifevantage i.e., Lifevantage and Legato Merger go up and down completely randomly.
Pair Corralation between Lifevantage and Legato Merger
Given the investment horizon of 90 days Lifevantage is expected to generate 15.63 times less return on investment than Legato Merger. But when comparing it to its historical volatility, Lifevantage is 7.86 times less risky than Legato Merger. It trades about 0.11 of its potential returns per unit of risk. Legato Merger II is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 321.00 in Legato Merger II on September 13, 2024 and sell it today you would earn a total of 423.00 from holding Legato Merger II or generate 131.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifevantage vs. Legato Merger II
Performance |
| Timeline |
| Lifevantage |
| Legato Merger II |
Lifevantage and Legato Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifevantage and Legato Merger
The main advantage of trading using opposite Lifevantage and Legato Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, Legato Merger 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 Legato Merger will offset losses from the drop in Legato Merger's long position.| Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods | Lifevantage vs. Seneca Foods Corp |
| Legato Merger vs. Cebu Air ADR | Legato Merger vs. Taiwan Semiconductor Manufacturing | Legato Merger vs. Elmos Semiconductor SE | Legato Merger vs. Micron Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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