Correlation Between Aryzta AG and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Aryzta AG 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 Aryzta AG and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aryzta AG PK and Lifeway Foods, you can compare the effects of market volatilities on Aryzta AG 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 Aryzta AG with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aryzta AG and Lifeway Foods.
Diversification Opportunities for Aryzta AG and Lifeway Foods
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aryzta and Lifeway is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aryzta AG PK and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and Aryzta AG 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 Aryzta AG PK 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 Aryzta AG i.e., Aryzta AG and Lifeway Foods go up and down completely randomly.
Pair Corralation between Aryzta AG and Lifeway Foods
Assuming the 90 days horizon Aryzta AG PK is expected to under-perform the Lifeway Foods. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aryzta AG PK is 1.25 times less risky than Lifeway Foods. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Lifeway Foods is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 2,637 in Lifeway Foods on August 27, 2024 and sell it today you would lose (211.00) from holding Lifeway Foods or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aryzta AG PK vs. Lifeway Foods
Performance |
| Timeline |
| Aryzta AG PK |
| Lifeway Foods |
Aryzta AG and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aryzta AG and Lifeway Foods
The main advantage of trading using opposite Aryzta AG and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aryzta AG 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.| Aryzta AG vs. Artisan Consumer Goods | Aryzta AG vs. Altavoz Entertainment | Aryzta AG vs. Avi Ltd ADR | Aryzta AG vs. The a2 Milk |
| Lifeway Foods vs. Bellring Brands LLC | Lifeway Foods vs. Ingredion Incorporated | Lifeway Foods vs. Nomad Foods | Lifeway Foods vs. Post Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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