Correlation Between Lifevantage and Western Copper
Can any of the company-specific risk be diversified away by investing in both Lifevantage and Western Copper 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 Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifevantage and Western Copper and, you can compare the effects of market volatilities on Lifevantage and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and Western Copper.
Diversification Opportunities for Lifevantage and Western Copper
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lifevantage and Western is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Lifevantage i.e., Lifevantage and Western Copper go up and down completely randomly.
Pair Corralation between Lifevantage and Western Copper
Given the investment horizon of 90 days Lifevantage is expected to generate 1.4 times more return on investment than Western Copper. However, Lifevantage is 1.4 times more volatile than Western Copper and. It trades about 0.09 of its potential returns per unit of risk. Western Copper and is currently generating about -0.01 per unit of risk. If you would invest 346.00 in Lifevantage on August 30, 2024 and sell it today you would earn a total of 1,094 from holding Lifevantage or generate 316.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifevantage vs. Western Copper and
Performance |
| Timeline |
| Lifevantage |
| Western Copper |
Lifevantage and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifevantage and Western Copper
The main advantage of trading using opposite Lifevantage and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
| Western Copper vs. Lithium Americas Corp | Western Copper vs. Caterpillar | Western Copper vs. Exxon Mobil Corp | Western Copper vs. Cisco Systems |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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