Correlation Between Raytech Holding and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Raytech Holding 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 Raytech Holding and Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raytech Holding Limited and Lifevantage, you can compare the effects of market volatilities on Raytech Holding 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 Raytech Holding with a short position of Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytech Holding and Lifevantage.
Diversification Opportunities for Raytech Holding and Lifevantage
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Raytech and Lifevantage is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Raytech Holding Limited and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Raytech Holding 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 Raytech Holding Limited 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 Raytech Holding i.e., Raytech Holding and Lifevantage go up and down completely randomly.
Pair Corralation between Raytech Holding and Lifevantage
Considering the 90-day investment horizon Raytech Holding Limited is expected to under-perform the Lifevantage. But the stock apears to be less risky and, when comparing its historical volatility, Raytech Holding Limited is 1.84 times less risky than Lifevantage. The stock trades about -0.23 of its potential returns per unit of risk. The Lifevantage is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,674 in Lifevantage on November 5, 2024 and sell it today you would earn a total of 442.00 from holding Lifevantage or generate 26.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytech Holding Limited vs. Lifevantage
Performance |
| Timeline |
| Raytech Holding |
| Lifevantage |
Raytech Holding and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytech Holding and Lifevantage
The main advantage of trading using opposite Raytech Holding and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytech Holding 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.| Raytech Holding vs. MGIC Investment Corp | Raytech Holding vs. Harmony Gold Mining | Raytech Holding vs. Sun Life Financial | Raytech Holding vs. Direct Line Insurance |
| Lifevantage vs. Colgate Palmolive | Lifevantage vs. Estee Lauder Companies | Lifevantage vs. Procter Gamble | Lifevantage 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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