Correlation Between FitLife Brands, and New Ulm

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

Diversification Opportunities for FitLife Brands, and New Ulm

-0.51

Correlation Coefficient

FitLife Brands,  New Ulm

Excellent diversification

The 3 months correlation between FitLife and New is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and New Ulm Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Ulm Telecom 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 Ulm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Ulm Telecom has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and New Ulm go up and down completely randomly.

Pair Corralation between FitLife Brands, and New Ulm

Given the investment horizon of 90 days FitLife Brands, is expected to generate 7.94 times less return on investment than New Ulm. But when comparing it to its historical volatility, FitLife Brands, Common is 2.38 times less risky than New Ulm. It trades about 0.01 of its potential returns per unit of risk. New Ulm Telecom is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  800.00  in New Ulm Telecom on September 4, 2024 and sell it today you would earn a total of  60.00  from holding New Ulm Telecom or generate 7.5% return on investment over 90 days.

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

FitLife Brands, Common  vs.  New Ulm Telecom

FitLife Brands, Common

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FitLife Brands, Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

New Ulm Telecom

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in New Ulm Telecom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, New Ulm reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FitLife Brands, and New Ulm

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

The idea behind FitLife Brands, Common and New Ulm Telecom 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.