Correlation Between LeanLife Health and Nates Food

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

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

Diversification Opportunities for LeanLife Health and Nates Food

1.0

Correlation Coefficient

LeanLife Health  Nates Food

No risk reduction

The 3 months correlation between LeanLife and Nates is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding LeanLife Health and Nates Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nates Food 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 Nates Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nates Food has no effect on the direction of LeanLife Health i.e., LeanLife Health and Nates Food go up and down completely randomly.

Pair Corralation between LeanLife Health and Nates Food

If you would invest  0.01  in Nates Food Co on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Nates Food Co or generate 0.0% return on investment over 90 days.

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

LeanLife Health  vs.  Nates Food Co

LeanLife Health

Risk-Adjusted Performance

0 of 100

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.

Nates Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nates Food Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Nates Food is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with LeanLife Health and Nates Food

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

The idea behind LeanLife Health and Nates Food Co 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.