Correlation Between Weave Communications and LifeMD Preferred

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

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

Diversification Opportunities for Weave Communications and LifeMD Preferred

-0.65

Correlation Coefficient

Weave Communications  LifeMD Preferred

Excellent diversification

The 3 months correlation between Weave and LifeMD is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Weave Communications and LifeMD Preferred Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeMD Preferred Series and Weave Communications 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 Weave Communications are associated (or correlated) with LifeMD Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeMD Preferred Series has no effect on the direction of Weave Communications i.e., Weave Communications and LifeMD Preferred go up and down completely randomly.

Pair Corralation between Weave Communications and LifeMD Preferred

Given the investment horizon of 90 days Weave Communications is expected to under-perform the LifeMD Preferred. In addition to that, Weave Communications is 1.75 times more volatile than LifeMD Preferred Series. It trades about -0.15 of its total potential returns per unit of risk. LifeMD Preferred Series is currently generating about 0.14 per unit of volatility. If you would invest  2,142  in LifeMD Preferred Series on December 28, 2024 and sell it today you would earn a total of  333.00  from holding LifeMD Preferred Series or generate 15.55% return on investment over 90 days.

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

Weave Communications  vs.  LifeMD Preferred Series

Weave Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Weave Communications 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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

LifeMD Preferred Series

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LifeMD Preferred Series are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, LifeMD Preferred reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Weave Communications and LifeMD Preferred

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

The idea behind Weave Communications and LifeMD Preferred Series 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.