Correlation Between Lifevantage and UbiSoft Entertainment

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

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

Diversification Opportunities for Lifevantage and UbiSoft Entertainment

-0.25

Correlation Coefficient

Lifevantage  UbiSoft Entertainment

Very good diversification

The 3 months correlation between Lifevantage and UbiSoft is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lifevantage and UbiSoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UbiSoft Entertainment 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 UbiSoft Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UbiSoft Entertainment has no effect on the direction of Lifevantage i.e., Lifevantage and UbiSoft Entertainment go up and down completely randomly.

Pair Corralation between Lifevantage and UbiSoft Entertainment

Given the investment horizon of 90 days Lifevantage is expected to generate 1.38 times more return on investment than UbiSoft Entertainment. However, Lifevantage is 1.38 times more volatile than UbiSoft Entertainment. It trades about 0.19 of its potential returns per unit of risk. UbiSoft Entertainment is currently generating about -0.03 per unit of risk. If you would invest  1,165  in Lifevantage on October 5, 2024 and sell it today you would earn a total of  601.00  from holding Lifevantage or generate 51.59% return on investment over 90 days.

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

Lifevantage  vs.  UbiSoft Entertainment

Lifevantage

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 14 (%) 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.

UbiSoft Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UbiSoft Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Lifevantage and UbiSoft Entertainment

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

The idea behind Lifevantage and UbiSoft Entertainment 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.