Correlation Between Lifevantage and DAVITA

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Can any of the company-specific risk be diversified away by investing in both Lifevantage and DAVITA 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 DAVITA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifevantage and DAVITA INC 375, you can compare the effects of market volatilities on Lifevantage and DAVITA 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 DAVITA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and DAVITA.

Diversification Opportunities for Lifevantage and DAVITA

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Lifevantage and DAVITA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and DAVITA INC 375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAVITA INC 375 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 DAVITA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAVITA INC 375 has no effect on the direction of Lifevantage i.e., Lifevantage and DAVITA go up and down completely randomly.

Pair Corralation between Lifevantage and DAVITA

Given the investment horizon of 90 days Lifevantage is expected to generate 4.79 times more return on investment than DAVITA. However, Lifevantage is 4.79 times more volatile than DAVITA INC 375. It trades about 0.1 of its potential returns per unit of risk. DAVITA INC 375 is currently generating about 0.02 per unit of risk. If you would invest  474.00  in Lifevantage on September 12, 2024 and sell it today you would earn a total of  1,010  from holding Lifevantage or generate 213.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.4%
ValuesDaily Returns

Lifevantage  vs.  DAVITA INC 375

 Performance 
       Timeline  
Lifevantage 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Lifevantage displayed solid returns over the last few months and may actually be approaching a breakup point.
DAVITA INC 375 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days DAVITA INC 375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DAVITA INC 375 investors.

Lifevantage and DAVITA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lifevantage and DAVITA

The main advantage of trading using opposite Lifevantage and DAVITA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, DAVITA 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 DAVITA will offset losses from the drop in DAVITA's long position.
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The idea behind Lifevantage and DAVITA INC 375 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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