Correlation Between Emclaire Financial and Lifevantage

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

By analyzing existing cross correlation between Emclaire Financial Corp and Lifevantage, you can compare the effects of market volatilities on Emclaire Financial and Lifevantage 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 Emclaire Financial with a short position of Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emclaire Financial and Lifevantage.

Diversification Opportunities for Emclaire Financial and Lifevantage

0.33

Correlation Coefficient

Emclaire Financial  Lifevantage

Weak diversification

The 3 months correlation between Emclaire and Lifevantage is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Emclaire Financial Corp and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and Emclaire Financial 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 Emclaire Financial Corp are associated (or correlated) with Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Emclaire Financial i.e., Emclaire Financial and Lifevantage go up and down completely randomly.

Pair Corralation between Emclaire Financial and Lifevantage

If you would invest  614.00  in Lifevantage on February 7, 2024 and sell it today you would earn a total of  43.00  from holding Lifevantage or generate 7.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Emclaire Financial Corp  vs.  Lifevantage

Emclaire Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emclaire Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Emclaire Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Lifevantage

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lifevantage are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Lifevantage may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Emclaire Financial and Lifevantage

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

The idea behind Emclaire Financial Corp and Lifevantage 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.