Correlation Between LifeMD and So Young

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

By analyzing existing cross correlation between LifeMD Inc and So Young International, you can compare the effects of market volatilities on LifeMD and So Young 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 LifeMD with a short position of So Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifeMD and So Young.

Diversification Opportunities for LifeMD and So Young

-0.57

Correlation Coefficient

LifeMD  So Young

Excellent diversification

The 3 months correlation between LifeMD and So Young is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding LifeMD Inc and So Young International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Young International and LifeMD 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 LifeMD Inc are associated (or correlated) with So Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Young International has no effect on the direction of LifeMD i.e., LifeMD and So Young go up and down completely randomly.

Pair Corralation between LifeMD and So Young

Given the investment horizon of 90 days LifeMD is expected to generate 3.67 times less return on investment than So Young. In addition to that, LifeMD is 1.28 times more volatile than So Young International. It trades about 0.06 of its total potential returns per unit of risk. So Young International is currently generating about 0.3 per unit of volatility. If you would invest  77.00  in So Young International on October 24, 2024 and sell it today you would earn a total of  16.00  from holding So Young International or generate 20.78% return on investment over 90 days.

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

LifeMD Inc  vs.  So Young International

LifeMD Inc

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LifeMD Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, LifeMD exhibited solid returns over the last few months and may actually be approaching a breakup point.

So Young International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days So Young International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, So Young is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LifeMD and So Young

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

The idea behind LifeMD Inc and So Young International 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..