Correlation Between Lead Real and Lifevantage

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

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

Diversification Opportunities for Lead Real and Lifevantage

0.66

Correlation Coefficient

Lead Real  Lifevantage

Poor diversification

The 3 months correlation between Lead and Lifevantage is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lead Real Estate and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Lead Real 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 Lead Real Estate are associated (or correlated) with Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Lead Real i.e., Lead Real and Lifevantage go up and down completely randomly.

Pair Corralation between Lead Real and Lifevantage

Considering the 90-day investment horizon Lead Real Estate is expected to under-perform the Lifevantage. In addition to that, Lead Real is 3.58 times more volatile than Lifevantage. It trades about -0.09 of its total potential returns per unit of risk. Lifevantage is currently generating about 0.15 per unit of volatility. If you would invest  1,405  in Lifevantage on September 25, 2024 and sell it today you would earn a total of  384.00  from holding Lifevantage or generate 27.33% return on investment over 90 days.

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

Lead Real Estate  vs.  Lifevantage

Lead Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lead Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Lifevantage

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 11 (%) 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.

Pair Trading with Lead Real and Lifevantage

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

The idea behind Lead Real Estate and Lifevantage 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.