Correlation Between Lifevantage and Smurfit WestRock
Can any of the company-specific risk be diversified away by investing in both Lifevantage and Smurfit WestRock 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 Smurfit WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifevantage and Smurfit WestRock plc, you can compare the effects of market volatilities on Lifevantage and Smurfit WestRock 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 Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifevantage and Smurfit WestRock.
Diversification Opportunities for Lifevantage and Smurfit WestRock
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifevantage and Smurfit is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and Smurfit WestRock plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smurfit WestRock plc 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 Smurfit WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smurfit WestRock plc has no effect on the direction of Lifevantage i.e., Lifevantage and Smurfit WestRock go up and down completely randomly.
Pair Corralation between Lifevantage and Smurfit WestRock
Given the investment horizon of 90 days Lifevantage is expected to generate 2.38 times more return on investment than Smurfit WestRock. However, Lifevantage is 2.38 times more volatile than Smurfit WestRock plc. It trades about 0.01 of its potential returns per unit of risk. Smurfit WestRock plc is currently generating about -0.12 per unit of risk. If you would invest 1,631 in Lifevantage on December 22, 2024 and sell it today you would lose (85.00) from holding Lifevantage or give up 5.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lifevantage vs. Smurfit WestRock plc
Performance |
Timeline |
Lifevantage |
Smurfit WestRock plc |
Lifevantage and Smurfit WestRock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lifevantage and Smurfit WestRock
The main advantage of trading using opposite Lifevantage and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifevantage position performs unexpectedly, Smurfit WestRock 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 Smurfit WestRock will offset losses from the drop in Smurfit WestRock's long position.Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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