Correlation Between Laird Superfood and Herbalife Nutrition
Can any of the company-specific risk be diversified away by investing in both Laird Superfood and Herbalife Nutrition 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 Laird Superfood and Herbalife Nutrition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laird Superfood and Herbalife Nutrition, you can compare the effects of market volatilities on Laird Superfood and Herbalife Nutrition 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 Laird Superfood with a short position of Herbalife Nutrition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laird Superfood and Herbalife Nutrition.
Diversification Opportunities for Laird Superfood and Herbalife Nutrition
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Laird and Herbalife is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Laird Superfood and Herbalife Nutrition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herbalife Nutrition and Laird Superfood 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 Laird Superfood are associated (or correlated) with Herbalife Nutrition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herbalife Nutrition has no effect on the direction of Laird Superfood i.e., Laird Superfood and Herbalife Nutrition go up and down completely randomly.
Pair Corralation between Laird Superfood and Herbalife Nutrition
Considering the 90-day investment horizon Laird Superfood is expected to generate 1.88 times more return on investment than Herbalife Nutrition. However, Laird Superfood is 1.88 times more volatile than Herbalife Nutrition. It trades about 0.24 of its potential returns per unit of risk. Herbalife Nutrition is currently generating about -0.01 per unit of risk. If you would invest 382.00 in Laird Superfood on September 4, 2024 and sell it today you would earn a total of 529.00 from holding Laird Superfood or generate 138.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laird Superfood vs. Herbalife Nutrition
Performance |
| Timeline |
| Laird Superfood |
| Herbalife Nutrition |
Laird Superfood and Herbalife Nutrition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laird Superfood and Herbalife Nutrition
The main advantage of trading using opposite Laird Superfood and Herbalife Nutrition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laird Superfood position performs unexpectedly, Herbalife Nutrition 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 Herbalife Nutrition will offset losses from the drop in Herbalife Nutrition's long position.| Laird Superfood vs. Campbell Soup | Laird Superfood vs. ConAgra Foods | Laird Superfood vs. Hormel Foods | Laird Superfood vs. Kellanova |
| Herbalife Nutrition vs. Colgate Palmolive | Herbalife Nutrition vs. Estee Lauder Companies | Herbalife Nutrition vs. Procter Gamble | Herbalife Nutrition vs. United Guardian |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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