Correlation Between Lifetime Brands and Energy Focu
Can any of the company-specific risk be diversified away by investing in both Lifetime Brands and Energy Focu 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 Lifetime Brands and Energy Focu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifetime Brands and Energy Focu, you can compare the effects of market volatilities on Lifetime Brands and Energy Focu 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 Lifetime Brands with a short position of Energy Focu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifetime Brands and Energy Focu.
Diversification Opportunities for Lifetime Brands and Energy Focu
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lifetime and Energy is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lifetime Brands and Energy Focu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Focu and Lifetime 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 Lifetime Brands are associated (or correlated) with Energy Focu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Focu has no effect on the direction of Lifetime Brands i.e., Lifetime Brands and Energy Focu go up and down completely randomly.
Pair Corralation between Lifetime Brands and Energy Focu
Given the investment horizon of 90 days Lifetime Brands is expected to generate 0.88 times more return on investment than Energy Focu. However, Lifetime Brands is 1.14 times less risky than Energy Focu. It trades about 0.0 of its potential returns per unit of risk. Energy Focu is currently generating about -0.18 per unit of risk. If you would invest 1,026 in Lifetime Brands on January 25, 2024 and sell it today you would lose (25.00) from holding Lifetime Brands or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifetime Brands vs. Energy Focu
Performance |
| Timeline |
| Lifetime Brands |
| Energy Focu |
Lifetime Brands and Energy Focu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifetime Brands and Energy Focu
The main advantage of trading using opposite Lifetime Brands and Energy Focu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifetime Brands position performs unexpectedly, Energy Focu 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 Energy Focu will offset losses from the drop in Energy Focu's long position.| Lifetime Brands vs. FG Financial Group | Lifetime Brands vs. Yoshitsu Co Ltd | Lifetime Brands vs. Hour Loop | Lifetime Brands vs. Direct Digital Holdings |
| Energy Focu vs. Petros Pharmaceuticals | Energy Focu vs. Pioneer Power Solutions | Energy Focu vs. Ensysce Biosciences | Energy Focu vs. ShiftPixy |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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