Correlation Between Lifevantage and Mazda
Can any of the company-specific risk be diversified away by investing in both Lifevantage and Mazda 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 Mazda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifevantage and Mazda Motor, you can compare the effects of market volatilities on Lifevantage and Mazda 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 Mazda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and Mazda.
Diversification Opportunities for Lifevantage and Mazda
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lifevantage and Mazda is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Mazda Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mazda Motor 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 Mazda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mazda Motor has no effect on the direction of Lifevantage i.e., Lifevantage and Mazda go up and down completely randomly.
Pair Corralation between Lifevantage and Mazda
Given the investment horizon of 90 days Lifevantage is expected to generate 1.45 times more return on investment than Mazda. However, Lifevantage is 1.45 times more volatile than Mazda Motor. It trades about 0.06 of its potential returns per unit of risk. Mazda Motor is currently generating about -0.19 per unit of risk. If you would invest 1,298 in Lifevantage on August 28, 2024 and sell it today you would earn a total of 85.00 from holding Lifevantage or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifevantage vs. Mazda Motor
Performance |
| Timeline |
| Lifevantage |
| Mazda Motor |
Lifevantage and Mazda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifevantage and Mazda
The main advantage of trading using opposite Lifevantage and Mazda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, Mazda 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 Mazda will offset losses from the drop in Mazda's long position.| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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