Correlation Between Four Leaf and Lifevantage

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

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

Diversification Opportunities for Four Leaf and Lifevantage

-0.55

Correlation Coefficient

Four Leaf  Lifevantage

Excellent diversification

The 3 months correlation between Four and Lifevantage is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Four Leaf Acquisition and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Four Leaf 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 Four Leaf Acquisition 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 Four Leaf i.e., Four Leaf and Lifevantage go up and down completely randomly.

Pair Corralation between Four Leaf and Lifevantage

Given the investment horizon of 90 days Four Leaf Acquisition is expected to generate 0.05 times more return on investment than Lifevantage. However, Four Leaf Acquisition is 20.44 times less risky than Lifevantage. It trades about 0.12 of its potential returns per unit of risk. Lifevantage is currently generating about -0.03 per unit of risk. If you would invest  1,109  in Four Leaf Acquisition on December 29, 2024 and sell it today you would earn a total of  21.00  from holding Four Leaf Acquisition or generate 1.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Four Leaf Acquisition  vs.  Lifevantage

Four Leaf Acquisition

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Four Leaf Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Four Leaf is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Lifevantage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifevantage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Four Leaf and Lifevantage

The main advantage of trading using opposite Four Leaf and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Leaf 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 Four Leaf Acquisition 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.