Correlation Between Beyond Oil and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Beyond Oil 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 Beyond Oil and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Oil and Lifeway Foods, you can compare the effects of market volatilities on Beyond Oil 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 Beyond Oil with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Oil and Lifeway Foods.
Diversification Opportunities for Beyond Oil and Lifeway Foods
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beyond and Lifeway is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Oil and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and Beyond Oil 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 Beyond Oil 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 Beyond Oil i.e., Beyond Oil and Lifeway Foods go up and down completely randomly.
Pair Corralation between Beyond Oil and Lifeway Foods
Assuming the 90 days horizon Beyond Oil is expected to generate 0.72 times more return on investment than Lifeway Foods. However, Beyond Oil is 1.39 times less risky than Lifeway Foods. It trades about 0.13 of its potential returns per unit of risk. Lifeway Foods is currently generating about -0.1 per unit of risk. If you would invest 104.00 in Beyond Oil on August 27, 2024 and sell it today you would earn a total of 7.00 from holding Beyond Oil or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Oil vs. Lifeway Foods
Performance |
| Timeline |
| Beyond Oil |
| Lifeway Foods |
Beyond Oil and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Oil and Lifeway Foods
The main advantage of trading using opposite Beyond Oil and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Oil 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.| Beyond Oil vs. Titan Machinery | Beyond Oil vs. Everspin Technologies | Beyond Oil vs. Asbury Automotive Group | Beyond Oil vs. Simon Property Group |
| Lifeway Foods vs. Bellring Brands LLC | Lifeway Foods vs. Ingredion Incorporated | Lifeway Foods vs. Nomad Foods | Lifeway Foods vs. Simply Good Foods |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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