Correlation Between Lifevantage and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Lifevantage and Westrock Coffee 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 Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifevantage and Westrock Coffee, you can compare the effects of market volatilities on Lifevantage and Westrock Coffee 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 Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and Westrock Coffee.
Diversification Opportunities for Lifevantage and Westrock Coffee
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifevantage and Westrock is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee 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 Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of Lifevantage i.e., Lifevantage and Westrock Coffee go up and down completely randomly.
Pair Corralation between Lifevantage and Westrock Coffee
Given the investment horizon of 90 days Lifevantage is expected to generate 1.49 times less return on investment than Westrock Coffee. But when comparing it to its historical volatility, Lifevantage is 1.07 times less risky than Westrock Coffee. It trades about 0.18 of its potential returns per unit of risk. Westrock Coffee is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 673.00 in Westrock Coffee on September 2, 2024 and sell it today you would earn a total of 130.00 from holding Westrock Coffee or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifevantage vs. Westrock Coffee
Performance |
| Timeline |
| Lifevantage |
| Westrock Coffee |
Lifevantage and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifevantage and Westrock Coffee
The main advantage of trading using opposite Lifevantage and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, Westrock Coffee 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 Westrock Coffee will offset losses from the drop in Westrock Coffee's long position.| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
| Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel Foods | Westrock Coffee vs. Kellanova |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |