Correlation Between Blockmate Ventures and Lifeist Wellness

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

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

Diversification Opportunities for Blockmate Ventures and Lifeist Wellness

-0.74

Correlation Coefficient

Blockmate Ventures  Lifeist Wellness

Pay attention - limited upside

The 3 months correlation between Blockmate and Lifeist is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Blockmate Ventures and Lifeist Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeist Wellness and Blockmate Ventures 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 Blockmate Ventures are associated (or correlated) with Lifeist Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeist Wellness has no effect on the direction of Blockmate Ventures i.e., Blockmate Ventures and Lifeist Wellness go up and down completely randomly.

Pair Corralation between Blockmate Ventures and Lifeist Wellness

Assuming the 90 days trading horizon Blockmate Ventures is expected to generate 2.14 times more return on investment than Lifeist Wellness. However, Blockmate Ventures is 2.14 times more volatile than Lifeist Wellness. It trades about 0.23 of its potential returns per unit of risk. Lifeist Wellness is currently generating about 0.11 per unit of risk. If you would invest  9.00  in Blockmate Ventures on September 17, 2024 and sell it today you would earn a total of  7.00  from holding Blockmate Ventures or generate 77.78% return on investment over 90 days.

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

Blockmate Ventures  vs.  Lifeist Wellness

Blockmate Ventures

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blockmate Ventures are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Blockmate Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

Lifeist Wellness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lifeist Wellness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Blockmate Ventures and Lifeist Wellness

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

The idea behind Blockmate Ventures and Lifeist Wellness 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.