Correlation Between GWILLI FOOD and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both GWILLI FOOD 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 GWILLI FOOD and LIFEWAY FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GWILLI FOOD and LIFEWAY FOODS, you can compare the effects of market volatilities on GWILLI FOOD 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 GWILLI FOOD with a short position of LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GWILLI FOOD and LIFEWAY FOODS.
Diversification Opportunities for GWILLI FOOD and LIFEWAY FOODS
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GWILLI and LIFEWAY is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY FOODS and GWILLI FOOD 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 GWILLI FOOD 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 GWILLI FOOD i.e., GWILLI FOOD and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between GWILLI FOOD and LIFEWAY FOODS
Assuming the 90 days trading horizon GWILLI FOOD is expected to under-perform the LIFEWAY FOODS. But the stock apears to be less risky and, when comparing its historical volatility, GWILLI FOOD is 1.7 times less risky than LIFEWAY FOODS. The stock trades about -0.01 of its potential returns per unit of risk. The LIFEWAY FOODS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,140 in LIFEWAY FOODS on October 25, 2024 and sell it today you would earn a total of 60.00 from holding LIFEWAY FOODS or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GWILLI FOOD vs. LIFEWAY FOODS
Performance |
| Timeline |
| GWILLI FOOD |
| LIFEWAY FOODS |
GWILLI FOOD and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GWILLI FOOD and LIFEWAY FOODS
The main advantage of trading using opposite GWILLI FOOD and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GWILLI FOOD 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's long position.| GWILLI FOOD vs. Titan Machinery | GWILLI FOOD vs. Australian Agricultural | GWILLI FOOD vs. Penta Ocean Construction Co | GWILLI FOOD vs. Major Drilling Group |
| LIFEWAY FOODS vs. NXP Semiconductors NV | LIFEWAY FOODS vs. BE Semiconductor Industries | LIFEWAY FOODS vs. Elmos Semiconductor SE | LIFEWAY FOODS vs. ELMOS SEMICONDUCTOR |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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