Correlation Between Natural Health and LightInTheBox Holding
Can any of the company-specific risk be diversified away by investing in both Natural Health and LightInTheBox Holding 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 Natural Health and LightInTheBox Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trend and LightInTheBox Holding Co, you can compare the effects of market volatilities on Natural Health and LightInTheBox Holding 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 Natural Health with a short position of LightInTheBox Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and LightInTheBox Holding.
Diversification Opportunities for Natural Health and LightInTheBox Holding
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Natural and LightInTheBox is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and LightInTheBox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightInTheBox Holding and Natural Health 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 Natural Health Trend are associated (or correlated) with LightInTheBox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightInTheBox Holding has no effect on the direction of Natural Health i.e., Natural Health and LightInTheBox Holding go up and down completely randomly.
Pair Corralation between Natural Health and LightInTheBox Holding
Given the investment horizon of 90 days Natural Health is expected to generate 24.83 times less return on investment than LightInTheBox Holding. But when comparing it to its historical volatility, Natural Health Trend is 2.71 times less risky than LightInTheBox Holding. It trades about 0.0 of its potential returns per unit of risk. LightInTheBox Holding Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 71.00 in LightInTheBox Holding Co on January 26, 2024 and sell it today you would earn a total of 1.16 from holding LightInTheBox Holding Co or generate 1.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Natural Health Trend vs. LightInTheBox Holding Co
Performance |
Timeline |
Natural Health Trend |
LightInTheBox Holding |
Natural Health and LightInTheBox Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Natural Health and LightInTheBox Holding
The main advantage of trading using opposite Natural Health and LightInTheBox Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, LightInTheBox Holding 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 LightInTheBox Holding will offset losses from the drop in LightInTheBox Holding's long position.Natural Health vs. Liquidity Services | Natural Health vs. Hour Loop | Natural Health vs. Qurate Retail Series | Natural Health vs. Emerge Commerce |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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