Correlation Between Lifevantage and Lonking Holdings
Can any of the company-specific risk be diversified away by investing in both Lifevantage and Lonking Holdings 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 Lonking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifevantage and Lonking Holdings Ltd, you can compare the effects of market volatilities on Lifevantage and Lonking Holdings 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 Lonking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and Lonking Holdings.
Diversification Opportunities for Lifevantage and Lonking Holdings
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lifevantage and Lonking is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Lonking Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonking Holdings 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 Lonking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonking Holdings has no effect on the direction of Lifevantage i.e., Lifevantage and Lonking Holdings go up and down completely randomly.
Pair Corralation between Lifevantage and Lonking Holdings
Given the investment horizon of 90 days Lifevantage is expected to generate 1.15 times more return on investment than Lonking Holdings. However, Lifevantage is 1.15 times more volatile than Lonking Holdings Ltd. It trades about 0.11 of its potential returns per unit of risk. Lonking Holdings Ltd is currently generating about -0.18 per unit of risk. If you would invest 1,415 in Lifevantage on September 14, 2024 and sell it today you would earn a total of 95.00 from holding Lifevantage or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifevantage vs. Lonking Holdings Ltd
Performance |
| Timeline |
| Lifevantage |
| Lonking Holdings |
Lifevantage and Lonking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifevantage and Lonking Holdings
The main advantage of trading using opposite Lifevantage and Lonking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, Lonking Holdings 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 Lonking Holdings will offset losses from the drop in Lonking Holdings' long position.| Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods | Lifevantage vs. Seneca Foods Corp |
| Lonking Holdings vs. Lifevantage | Lonking Holdings vs. NH Foods Ltd | Lonking Holdings vs. Where Food Comes | Lonking Holdings vs. Diageo PLC ADR |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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