Correlation Between FitLife Brands, and Butler National

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

By analyzing existing cross correlation between FitLife Brands, Common and Butler National Corp, you can compare the effects of market volatilities on FitLife Brands, and Butler National 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 FitLife Brands, with a short position of Butler National. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Butler National.

Diversification Opportunities for FitLife Brands, and Butler National

0.28

Correlation Coefficient

FitLife Brands,  Butler National

Modest diversification

The 3 months correlation between FitLife and Butler is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Butler National Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Butler National Corp and FitLife Brands, 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 FitLife Brands, Common are associated (or correlated) with Butler National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Butler National Corp has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Butler National go up and down completely randomly.

Pair Corralation between FitLife Brands, and Butler National

Given the investment horizon of 90 days FitLife Brands, Common is expected to under-perform the Butler National. But the stock apears to be less risky and, when comparing its historical volatility, FitLife Brands, Common is 1.08 times less risky than Butler National. The stock trades about -0.14 of its potential returns per unit of risk. The Butler National Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  181.00  in Butler National Corp on December 29, 2024 and sell it today you would lose (5.00) from holding Butler National Corp or give up 2.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

FitLife Brands, Common  vs.  Butler National Corp

FitLife Brands, Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days FitLife Brands, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Butler National Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Butler National Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Butler National is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FitLife Brands, and Butler National

The main advantage of trading using opposite FitLife Brands, and Butler National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Butler National 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 Butler National will offset losses from the drop in Butler National's long position.

The idea behind FitLife Brands, Common and Butler National Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.