Correlation Between FitLife Brands, and HONEYWELL

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

Diversification Opportunities for FitLife Brands, and HONEYWELL

0.24

Correlation Coefficient

FitLife Brands,  HONEYWELL

Modest diversification

The 3 months correlation between FitLife and HONEYWELL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and HONEYWELL INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTL INC 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTL INC has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and HONEYWELL go up and down completely randomly.

Pair Corralation between FitLife Brands, and HONEYWELL

Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 5.33 times more return on investment than HONEYWELL. However, FitLife Brands, is 5.33 times more volatile than HONEYWELL INTL INC. It trades about 0.01 of its potential returns per unit of risk. HONEYWELL INTL INC is currently generating about -0.13 per unit of risk. If you would invest  3,171  in FitLife Brands, Common on October 25, 2024 and sell it today you would lose (7.00) from holding FitLife Brands, Common or give up 0.22% of portfolio value over 90 days.

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

FitLife Brands, Common  vs.  HONEYWELL INTL INC

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

HONEYWELL INTL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HONEYWELL INTL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HONEYWELL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FitLife Brands, and HONEYWELL

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

The idea behind FitLife Brands, Common and HONEYWELL INTL INC 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.