Correlation Between Lifevantage and Apartment Investment

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

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

Diversification Opportunities for Lifevantage and Apartment Investment

0.38

Correlation Coefficient

Lifevantage  Apartment Investment

Weak diversification

The 3 months correlation between Lifevantage and Apartment is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Apartment Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Investment and and Lifevantage 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 Lifevantage are associated (or correlated) with Apartment Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Investment and has no effect on the direction of Lifevantage i.e., Lifevantage and Apartment Investment go up and down completely randomly.

Pair Corralation between Lifevantage and Apartment Investment

Given the investment horizon of 90 days Lifevantage is expected to generate 3.25 times less return on investment than Apartment Investment. In addition to that, Lifevantage is 3.27 times more volatile than Apartment Investment and. It trades about 0.01 of its total potential returns per unit of risk. Apartment Investment and is currently generating about 0.12 per unit of volatility. If you would invest  765.00  in Apartment Investment and on December 22, 2024 and sell it today you would earn a total of  96.00  from holding Apartment Investment and or generate 12.55% return on investment over 90 days.

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

Lifevantage  vs.  Apartment Investment and

Lifevantage

Risk-Adjusted Performance

Very Weak

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

Apartment Investment and

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apartment Investment and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Apartment Investment showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifevantage and Apartment Investment

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

The idea behind Lifevantage and Apartment Investment and 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.