Correlation Between FitLife Brands, and Western Union
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Western Union 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 Western Union 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 Western Union Co, you can compare the effects of market volatilities on FitLife Brands, and Western Union 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 Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Western Union.
Diversification Opportunities for FitLife Brands, and Western Union
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FitLife and Western is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union 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 Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Western Union go up and down completely randomly.
Pair Corralation between FitLife Brands, and Western Union
Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 1.72 times more return on investment than Western Union. However, FitLife Brands, is 1.72 times more volatile than Western Union Co. It trades about 0.06 of its potential returns per unit of risk. Western Union Co is currently generating about -0.01 per unit of risk. If you would invest 1,598 in FitLife Brands, Common on September 24, 2024 and sell it today you would earn a total of 1,546 from holding FitLife Brands, Common or generate 96.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.4% |
Values | Daily Returns |
FitLife Brands, Common vs. Western Union Co
Performance |
Timeline |
FitLife Brands, Common |
Western Union |
FitLife Brands, and Western Union Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FitLife Brands, and Western Union
The main advantage of trading using opposite FitLife Brands, and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.FitLife Brands, vs. Kimberly Clark | FitLife Brands, vs. Colgate Palmolive | FitLife Brands, vs. Procter Gamble | FitLife Brands, vs. The Clorox |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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