Correlation Between Western Copper and Lifevantage

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

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

Diversification Opportunities for Western Copper and Lifevantage

0.17

Correlation Coefficient

Western Copper  Lifevantage

Average diversification

The 3 months correlation between Western and Lifevantage is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Western Copper 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 Western Copper 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 Western Copper i.e., Western Copper and Lifevantage go up and down completely randomly.

Pair Corralation between Western Copper and Lifevantage

Considering the 90-day investment horizon Western Copper and is expected to generate 0.77 times more return on investment than Lifevantage. However, Western Copper and is 1.3 times less risky than Lifevantage. It trades about 0.08 of its potential returns per unit of risk. Lifevantage is currently generating about -0.05 per unit of risk. If you would invest  150.00  in Western Copper and on January 30, 2024 and sell it today you would earn a total of  7.00  from holding Western Copper and or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Western Copper and  vs.  Lifevantage

Western Copper

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Western Copper and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Western Copper displayed solid returns over the last few months and may actually be approaching a breakup point.

Lifevantage

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Lifevantage may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Western Copper and Lifevantage

The main advantage of trading using opposite Western Copper and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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 Western Copper 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.