Correlation Between Veru and Lifevantage

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

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

Diversification Opportunities for Veru and Lifevantage

-0.54

Correlation Coefficient

Veru  Lifevantage

Excellent diversification

The 3 months correlation between Veru and Lifevantage is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Veru Inc and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Veru 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 Veru Inc 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 Veru i.e., Veru and Lifevantage go up and down completely randomly.

Pair Corralation between Veru and Lifevantage

Given the investment horizon of 90 days Veru is expected to generate 5.69 times less return on investment than Lifevantage. But when comparing it to its historical volatility, Veru Inc is 1.05 times less risky than Lifevantage. It trades about 0.05 of its potential returns per unit of risk. Lifevantage is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,312  in Lifevantage on September 22, 2024 and sell it today you would earn a total of  424.00  from holding Lifevantage or generate 32.32% return on investment over 90 days.

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

Veru Inc  vs.  Lifevantage

Veru Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veru Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 unsteady basic indicators, Lifevantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veru and Lifevantage

The main advantage of trading using opposite Veru and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veru 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 Veru Inc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.