Correlation Between Sportsmans Warehouse and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Sportsmans Warehouse and Lifeway Foods 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 Sportsmans Warehouse and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sportsmans Warehouse Holdings and Lifeway Foods, you can compare the effects of market volatilities on Sportsmans Warehouse and Lifeway Foods 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 Sportsmans Warehouse with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportsmans Warehouse and Lifeway Foods.
Diversification Opportunities for Sportsmans Warehouse and Lifeway Foods
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sportsmans and Lifeway is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sportsmans Warehouse Holdings and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and Sportsmans Warehouse 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 Sportsmans Warehouse Holdings are associated (or correlated) with Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of Sportsmans Warehouse i.e., Sportsmans Warehouse and Lifeway Foods go up and down completely randomly.
Pair Corralation between Sportsmans Warehouse and Lifeway Foods
Assuming the 90 days horizon Sportsmans Warehouse Holdings is expected to under-perform the Lifeway Foods. In addition to that, Sportsmans Warehouse is 1.08 times more volatile than Lifeway Foods. It trades about -0.49 of its total potential returns per unit of risk. Lifeway Foods is currently generating about -0.04 per unit of volatility. If you would invest 2,220 in Lifeway Foods on October 25, 2024 and sell it today you would lose (40.00) from holding Lifeway Foods or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sportsmans Warehouse Holdings vs. Lifeway Foods
Performance |
| Timeline |
| Sportsmans Warehouse |
| Lifeway Foods |
Sportsmans Warehouse and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sportsmans Warehouse and Lifeway Foods
The main advantage of trading using opposite Sportsmans Warehouse and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sportsmans Warehouse position performs unexpectedly, Lifeway Foods 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 Lifeway Foods will offset losses from the drop in Lifeway Foods' long position.| Sportsmans Warehouse vs. Booking Holdings | Sportsmans Warehouse vs. Oriental Land Co | Sportsmans Warehouse vs. ANTA Sports Products | Sportsmans Warehouse vs. Li Ning Company |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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