Correlation Between DIH Holdings and Lifevantage

Can any of the company-specific risk be diversified away by investing in both DIH Holdings 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 DIH Holdings and Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DIH Holdings US, and Lifevantage, you can compare the effects of market volatilities on DIH Holdings 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 DIH Holdings with a short position of Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIH Holdings and Lifevantage.

Diversification Opportunities for DIH Holdings and Lifevantage

-0.7

Correlation Coefficient

DIH Holdings  Lifevantage

Excellent diversification

The 3 months correlation between DIH and Lifevantage is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding DIH Holdings US, and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and DIH Holdings 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 DIH Holdings US, 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 DIH Holdings i.e., DIH Holdings and Lifevantage go up and down completely randomly.

Pair Corralation between DIH Holdings and Lifevantage

Given the investment horizon of 90 days DIH Holdings US, is expected to generate 2.86 times more return on investment than Lifevantage. However, DIH Holdings is 2.86 times more volatile than Lifevantage. It trades about 0.24 of its potential returns per unit of risk. Lifevantage is currently generating about 0.24 per unit of risk. If you would invest  95.00  in DIH Holdings US, on September 17, 2024 and sell it today you would earn a total of  45.00  from holding DIH Holdings US, or generate 47.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

DIH Holdings US,  vs.  Lifevantage

DIH Holdings US,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DIH Holdings US, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Lifevantage

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Lifevantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DIH Holdings and Lifevantage

The main advantage of trading using opposite DIH Holdings and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIH Holdings 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.

The idea behind DIH Holdings US, and Lifevantage pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.