Correlation Between LeanLife Health and Lict

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

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

Diversification Opportunities for LeanLife Health and Lict

0.0

Correlation Coefficient

LeanLife Health  Lict

Pay attention - limited upside

The 3 months correlation between LeanLife and Lict is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LeanLife Health and Lict Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lict and LeanLife Health 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 LeanLife Health are associated (or correlated) with Lict. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lict has no effect on the direction of LeanLife Health i.e., LeanLife Health and Lict go up and down completely randomly.

Pair Corralation between LeanLife Health and Lict

Assuming the 90 days horizon LeanLife Health is expected to generate 15.24 times more return on investment than Lict. However, LeanLife Health is 15.24 times more volatile than Lict Corporation. It trades about 0.03 of its potential returns per unit of risk. Lict Corporation is currently generating about 0.14 per unit of risk. If you would invest  0.75  in LeanLife Health on October 11, 2024 and sell it today you would lose (0.25) from holding LeanLife Health or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.03%
Values	Daily Returns

LeanLife Health  vs.  Lict Corp.

LeanLife Health

Risk-Adjusted Performance

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Very Weak

Over the last 90 days LeanLife Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, LeanLife Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Lict

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lict Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Lict is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with LeanLife Health and Lict

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

The idea behind LeanLife Health and Lict Corporation 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..