Correlation Between Natures Sunshine and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Natures Sunshine and Lifevantage 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 Natures Sunshine and Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natures Sunshine Products and Lifevantage, you can compare the effects of market volatilities on Natures Sunshine and Lifevantage 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 Natures Sunshine with a short position of Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natures Sunshine and Lifevantage.
Diversification Opportunities for Natures Sunshine and Lifevantage
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Natures and Lifevantage is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Natures Sunshine 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 Natures Sunshine Products are associated (or correlated) with Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Natures Sunshine i.e., Natures Sunshine and Lifevantage go up and down completely randomly.
Pair Corralation between Natures Sunshine and Lifevantage
Given the investment horizon of 90 days Natures Sunshine Products is expected to generate 1.32 times more return on investment than Lifevantage. However, Natures Sunshine is 1.32 times more volatile than Lifevantage. It trades about 0.2 of its potential returns per unit of risk. Lifevantage is currently generating about 0.05 per unit of risk. If you would invest 1,325 in Natures Sunshine Products on August 27, 2024 and sell it today you would earn a total of 275.00 from holding Natures Sunshine Products or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natures Sunshine Products vs. Lifevantage
Performance |
| Timeline |
| Natures Sunshine Products |
| Lifevantage |
Natures Sunshine and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natures Sunshine and Lifevantage
The main advantage of trading using opposite Natures Sunshine and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natures Sunshine position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| Natures Sunshine vs. Seneca Foods Corp | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Associated British Foods |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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