Correlation Between Sligro Food and Lifevantage

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

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

Diversification Opportunities for Sligro Food and Lifevantage

-0.65

Correlation Coefficient

Sligro Food  Lifevantage

Excellent diversification

The 3 months correlation between Sligro and Lifevantage is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Sligro Food 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 Sligro Food Group 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 Sligro Food i.e., Sligro Food and Lifevantage go up and down completely randomly.

Pair Corralation between Sligro Food and Lifevantage

Assuming the 90 days horizon Sligro Food Group is expected to under-perform the Lifevantage. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 1.96 times less risky than Lifevantage. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Lifevantage is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  646.00  in Lifevantage on September 21, 2024 and sell it today you would earn a total of  1,127  from holding Lifevantage or generate 174.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.21%
Values	Daily Returns

Sligro Food Group  vs.  Lifevantage

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Lifevantage

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 16 (%) 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 Sligro Food and Lifevantage

The main advantage of trading using opposite Sligro Food and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food 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 Sligro Food Group 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.