Correlation Between Chiba Bank and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Chiba Bank 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 Chiba Bank and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank and Lifeway Foods, you can compare the effects of market volatilities on Chiba Bank 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 Chiba Bank with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Lifeway Foods.
Diversification Opportunities for Chiba Bank and Lifeway Foods
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chiba and Lifeway is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and Chiba Bank 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 Chiba Bank 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 Chiba Bank i.e., Chiba Bank and Lifeway Foods go up and down completely randomly.
Pair Corralation between Chiba Bank and Lifeway Foods
Assuming the 90 days horizon Chiba Bank is expected to generate 1.51 times less return on investment than Lifeway Foods. But when comparing it to its historical volatility, Chiba Bank is 1.84 times less risky than Lifeway Foods. It trades about 0.07 of its potential returns per unit of risk. Lifeway Foods is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,680 in Lifeway Foods on November 28, 2024 and sell it today you would earn a total of 320.00 from holding Lifeway Foods or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiba Bank vs. Lifeway Foods
Performance |
| Timeline |
| Chiba Bank |
| Lifeway Foods |
Chiba Bank and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and Lifeway Foods
The main advantage of trading using opposite Chiba Bank and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank 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.| Chiba Bank vs. China BlueChemical | Chiba Bank vs. TRI CHEMICAL LABORATINC | Chiba Bank vs. Sinopec Shanghai Petrochemical | Chiba Bank vs. Luckin Coffee |
| Lifeway Foods vs. Gol Intelligent Airlines | Lifeway Foods vs. PennantPark Investment | Lifeway Foods vs. United Airlines Holdings | Lifeway Foods vs. Japan Asia 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |