Correlation Between Lifevantage and Playstudios

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

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

Diversification Opportunities for Lifevantage and Playstudios

0.54

Correlation Coefficient

Lifevantage  Playstudios

Very weak diversification

The 3 months correlation between Lifevantage and Playstudios is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios 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 Playstudios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playstudios has no effect on the direction of Lifevantage i.e., Lifevantage and Playstudios go up and down completely randomly.

Pair Corralation between Lifevantage and Playstudios

Given the investment horizon of 90 days Lifevantage is expected to generate 1.08 times more return on investment than Playstudios. However, Lifevantage is 1.08 times more volatile than Playstudios. It trades about 0.17 of its potential returns per unit of risk. Playstudios is currently generating about 0.14 per unit of risk. If you would invest  1,047  in Lifevantage on September 13, 2024 and sell it today you would earn a total of  463.00  from holding Lifevantage or generate 44.22% return on investment over 90 days.

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

Lifevantage  vs.  Playstudios

Lifevantage

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Lifevantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Playstudios

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Playstudios are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Playstudios unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifevantage and Playstudios

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

The idea behind Lifevantage and Playstudios 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.