Correlation Between PACIFIC and Lifevantage

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

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

Diversification Opportunities for PACIFIC and Lifevantage

-0.01

Correlation Coefficient

PACIFIC  Lifevantage

Good diversification

The 3 months correlation between PACIFIC and Lifevantage is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC GAS AND and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and PACIFIC 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 PACIFIC GAS AND 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 PACIFIC i.e., PACIFIC and Lifevantage go up and down completely randomly.

Pair Corralation between PACIFIC and Lifevantage

Assuming the 90 days trading horizon PACIFIC GAS AND is expected to generate 0.19 times more return on investment than Lifevantage. However, PACIFIC GAS AND is 5.18 times less risky than Lifevantage. It trades about -0.16 of its potential returns per unit of risk. Lifevantage is currently generating about -0.04 per unit of risk. If you would invest  7,491  in PACIFIC GAS AND on December 26, 2024 and sell it today you would lose (751.00) from holding PACIFIC GAS AND or give up 10.03% of portfolio value over 90 days.

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

PACIFIC GAS AND  vs.  Lifevantage

PACIFIC GAS AND

Risk-Adjusted Performance

Very Weak

Over the last 90 days PACIFIC GAS AND has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PACIFIC GAS AND investors.

Lifevantage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifevantage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PACIFIC and Lifevantage

The main advantage of trading using opposite PACIFIC and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC 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 PACIFIC GAS AND 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.