Correlation Between Lifevantage and ATRenew

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

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

Diversification Opportunities for Lifevantage and ATRenew

0.59

Correlation Coefficient

Lifevantage  ATRenew

Very weak diversification

The 3 months correlation between Lifevantage and ATRenew is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC 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 ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Lifevantage i.e., Lifevantage and ATRenew go up and down completely randomly.

Pair Corralation between Lifevantage and ATRenew

Given the investment horizon of 90 days Lifevantage is expected to generate 0.8 times more return on investment than ATRenew. However, Lifevantage is 1.25 times less risky than ATRenew. It trades about 0.23 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.1 per unit of risk. If you would invest  997.00  in Lifevantage on September 17, 2024 and sell it today you would earn a total of  691.00  from holding Lifevantage or generate 69.31% return on investment over 90 days.

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

Lifevantage  vs.  ATRenew Inc DRC

Lifevantage

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 18 (%) 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.

ATRenew Inc DRC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ATRenew exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifevantage and ATRenew

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

The idea behind Lifevantage and ATRenew Inc DRC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .