Correlation Between FitLife Brands, and United Guardian

Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and United Guardian 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 United Guardian 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 United Guardian, you can compare the effects of market volatilities on FitLife Brands, and United Guardian 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 United Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and United Guardian.

Diversification Opportunities for FitLife Brands, and United Guardian

0.68

Correlation Coefficient

FitLife Brands,  United Guardian

Poor diversification

The 3 months correlation between FitLife and United is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and United Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Guardian 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 United Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Guardian has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and United Guardian go up and down completely randomly.

Pair Corralation between FitLife Brands, and United Guardian

Given the investment horizon of 90 days FitLife Brands, is expected to generate 11.69 times less return on investment than United Guardian. But when comparing it to its historical volatility, FitLife Brands, Common is 2.1 times less risky than United Guardian. It trades about 0.01 of its potential returns per unit of risk. United Guardian is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,185  in United Guardian on August 10, 2024 and sell it today you would earn a total of  42.00  from holding United Guardian or generate 3.54% return on investment over 90 days.

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

FitLife Brands, Common  vs.  United Guardian

FitLife Brands, Common

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FitLife Brands, Common are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, FitLife Brands, may actually be approaching a critical reversion point that can send shares even higher in December 2024.

United Guardian

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in United Guardian are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, United Guardian may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with FitLife Brands, and United Guardian

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

The idea behind FitLife Brands, Common and United Guardian 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 Commodity Directory module to find actively traded commodities issued by global exchanges.