Correlation Between FitLife Brands, and Noble Romans

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

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

Diversification Opportunities for FitLife Brands, and Noble Romans

-0.12

Correlation Coefficient

FitLife Brands,  Noble Romans

Good diversification

The 3 months correlation between FitLife and Noble is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Noble Romans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Romans and FitLife Brands, 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 FitLife Brands, Common are associated (or correlated) with Noble Romans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Romans has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Noble Romans go up and down completely randomly.

Pair Corralation between FitLife Brands, and Noble Romans

Given the investment horizon of 90 days FitLife Brands, is expected to generate 2.2 times less return on investment than Noble Romans. But when comparing it to its historical volatility, FitLife Brands, Common is 2.7 times less risky than Noble Romans. It trades about 0.07 of its potential returns per unit of risk. Noble Romans is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Noble Romans on June 22, 2024 and sell it today you would earn a total of  3.00  from holding Noble Romans or generate 8.33% return on investment over 90 days.

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

FitLife Brands, Common  vs.  Noble Romans

FitLife Brands, Common

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FitLife Brands, Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Noble Romans

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Noble Romans are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Noble Romans displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FitLife Brands, and Noble Romans

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

The idea behind FitLife Brands, Common and Noble Romans 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.