Correlation Between Life On and Andersons

Can any of the company-specific risk be diversified away by investing in both Life On and Andersons 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 Life On and Andersons into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Life On Earth and The Andersons, you can compare the effects of market volatilities on Life On and Andersons 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 Life On with a short position of Andersons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life On and Andersons.

Diversification Opportunities for Life On and Andersons

0.0

Correlation Coefficient

Life On  Andersons

Pay attention - limited upside

The 3 months correlation between Life and Andersons is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Life On Earth and The Andersons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andersons and Life On 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 Life On Earth are associated (or correlated) with Andersons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andersons has no effect on the direction of Life On i.e., Life On and Andersons go up and down completely randomly.

Pair Corralation between Life On and Andersons

If you would invest  3,961  in The Andersons on December 30, 2024 and sell it today you would earn a total of  365.00  from holding The Andersons or generate 9.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Life On Earth  vs.  The Andersons

Life On Earth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Life On Earth has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Life On is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Andersons

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Andersons are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, Andersons may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Life On and Andersons

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

The idea behind Life On Earth and The Andersons 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.