Correlation Between MSP Recovery and LifeMD Preferred

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

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

Diversification Opportunities for MSP Recovery and LifeMD Preferred

-0.43

Correlation Coefficient

MSP Recovery  LifeMD Preferred

Very good diversification

The 3 months correlation between MSP and LifeMD is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MSP Recovery 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 MSP Recovery 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 MSP Recovery 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 MSP Recovery i.e., MSP Recovery and LifeMD Preferred go up and down completely randomly.

Pair Corralation between MSP Recovery and LifeMD Preferred

Given the investment horizon of 90 days MSP Recovery is expected to under-perform the LifeMD Preferred. In addition to that, MSP Recovery is 4.93 times more volatile than LifeMD Preferred Series. It trades about -0.29 of its total potential returns per unit of risk. LifeMD Preferred Series is currently generating about 0.01 per unit of volatility. If you would invest  2,394  in LifeMD Preferred Series on May 27, 2025 and sell it today you would earn a total of  6.00  from holding LifeMD Preferred Series or generate 0.25% return on investment over 90 days.

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

MSP Recovery  vs.  LifeMD Preferred Series

MSP Recovery

Risk-Adjusted Performance

Weakest

Over the last 90 days MSP Recovery has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

LifeMD Preferred Series

Risk-Adjusted Performance

Weakest

Over the last 90 days LifeMD Preferred Series has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, LifeMD Preferred is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MSP Recovery and LifeMD Preferred

The main advantage of trading using opposite MSP Recovery and LifeMD Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSP Recovery 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 MSP Recovery 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.