Correlation Between Valvoline and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Valvoline 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 Valvoline and Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valvoline and Lifevantage, you can compare the effects of market volatilities on Valvoline 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 Valvoline with a short position of Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valvoline and Lifevantage.
Diversification Opportunities for Valvoline and Lifevantage
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Valvoline and Lifevantage is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Valvoline and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Valvoline 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 Valvoline 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 Valvoline i.e., Valvoline and Lifevantage go up and down completely randomly.
Pair Corralation between Valvoline and Lifevantage
Considering the 90-day investment horizon Valvoline is expected to generate 6.62 times less return on investment than Lifevantage. But when comparing it to its historical volatility, Valvoline is 2.62 times less risky than Lifevantage. It trades about 0.03 of its potential returns per unit of risk. Lifevantage is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 349.00 in Lifevantage on September 2, 2024 and sell it today you would earn a total of 1,112 from holding Lifevantage or generate 318.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valvoline vs. Lifevantage
Performance |
| Timeline |
| Valvoline |
| Lifevantage |
Valvoline and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valvoline and Lifevantage
The main advantage of trading using opposite Valvoline and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valvoline 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.| Valvoline vs. Cosan SA ADR | Valvoline vs. Delek Energy | Valvoline vs. Crossamerica Partners LP | Valvoline vs. Par Pacific Holdings |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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