Correlation Between FitLife Brands, and Newell

Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Newell 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 Newell 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 Newell Brands 5375, you can compare the effects of market volatilities on FitLife Brands, and Newell 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 Newell. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Newell.

Diversification Opportunities for FitLife Brands, and Newell

0.02

Correlation Coefficient

FitLife Brands,  Newell

Significant diversification

The 3 months correlation between FitLife and Newell is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Newell Brands 5375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands 5375 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 Newell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands 5375 has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Newell go up and down completely randomly.

Pair Corralation between FitLife Brands, and Newell

Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 0.42 times more return on investment than Newell. However, FitLife Brands, Common is 2.37 times less risky than Newell. It trades about -0.08 of its potential returns per unit of risk. Newell Brands 5375 is currently generating about -0.25 per unit of risk. If you would invest  3,250  in FitLife Brands, Common on October 9, 2024 and sell it today you would lose (115.00) from holding FitLife Brands, Common or give up 3.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

FitLife Brands, Common  vs.  Newell Brands 5375

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.

Newell Brands 5375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newell Brands 5375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for Newell Brands 5375 investors.

Pair Trading with FitLife Brands, and Newell

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

The idea behind FitLife Brands, Common and Newell Brands 5375 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.