Correlation Between FitLife Brands, and New Providence

Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and New Providence 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 New Providence 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 New Providence Acquisition, you can compare the effects of market volatilities on FitLife Brands, and New Providence 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 New Providence. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and New Providence.

Diversification Opportunities for FitLife Brands, and New Providence

-0.14

Correlation Coefficient

FitLife Brands,  New Providence

Good diversification

The 3 months correlation between FitLife and New is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and New Providence Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Providence Acqui 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 New Providence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Providence Acqui has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and New Providence go up and down completely randomly.

Pair Corralation between FitLife Brands, and New Providence

Given the investment horizon of 90 days FitLife Brands, is expected to generate 1.96 times less return on investment than New Providence. But when comparing it to its historical volatility, FitLife Brands, Common is 1.56 times less risky than New Providence. It trades about 0.0 of its potential returns per unit of risk. New Providence Acquisition is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,281  in New Providence Acquisition on September 27, 2024 and sell it today you would lose (61.00) from holding New Providence Acquisition or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.4%
Values	Daily Returns

FitLife Brands, Common  vs.  New Providence Acquisition

FitLife Brands, Common

Risk-Adjusted Performance

0 of 100

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 nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

New Providence Acqui

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days New Providence Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, New Providence 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 New Providence

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

The idea behind FitLife Brands, Common and New Providence Acquisition 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.