Correlation Between New Providence and FitLife Brands,
Can any of the company-specific risk be diversified away by investing in both New Providence and FitLife Brands, 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 New Providence and FitLife Brands, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Providence Acquisition and FitLife Brands, Common, you can compare the effects of market volatilities on New Providence and FitLife Brands, 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 New Providence with a short position of FitLife Brands,. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Providence and FitLife Brands,.
Diversification Opportunities for New Providence and FitLife Brands,
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and FitLife is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding New Providence Acquisition and FitLife Brands, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FitLife Brands, Common and New Providence 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 New Providence Acquisition are associated (or correlated) with FitLife Brands,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FitLife Brands, Common has no effect on the direction of New Providence i.e., New Providence and FitLife Brands, go up and down completely randomly.
Pair Corralation between New Providence and FitLife Brands,
Assuming the 90 days horizon New Providence Acquisition is expected to generate 0.59 times more return on investment than FitLife Brands,. However, New Providence Acquisition is 1.7 times less risky than FitLife Brands,. It trades about 0.12 of its potential returns per unit of risk. FitLife Brands, Common is currently generating about 0.04 per unit of risk. If you would invest 1,165 in New Providence Acquisition on September 3, 2024 and sell it today you would earn a total of 55.00 from holding New Providence Acquisition or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 69.05% |
| Values | Daily Returns |
New Providence Acquisition vs. FitLife Brands, Common
Performance |
| Timeline |
| New Providence Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| FitLife Brands, Common |
New Providence and FitLife Brands, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Providence and FitLife Brands,
The main advantage of trading using opposite New Providence and FitLife Brands, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Providence position performs unexpectedly, FitLife Brands, 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 FitLife Brands, will offset losses from the drop in FitLife Brands,'s long position.| New Providence vs. Stepan Company | New Providence vs. Consol Energy | New Providence vs. Gentex | New Providence vs. Olympic Steel |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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