Correlation Between Edible Garden and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Edible Garden 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 Edible Garden and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edible Garden AG and Lifeway Foods, you can compare the effects of market volatilities on Edible Garden 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 Edible Garden with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and Lifeway Foods.
Diversification Opportunities for Edible Garden and Lifeway Foods
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edible and Lifeway is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and Edible Garden 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 Edible Garden AG 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 Edible Garden i.e., Edible Garden and Lifeway Foods go up and down completely randomly.
Pair Corralation between Edible Garden and Lifeway Foods
Given the investment horizon of 90 days Edible Garden AG is expected to under-perform the Lifeway Foods. In addition to that, Edible Garden is 2.47 times more volatile than Lifeway Foods. It trades about -0.12 of its total potential returns per unit of risk. Lifeway Foods is currently generating about -0.1 per unit of volatility. If you would invest 2,655 in Lifeway Foods on August 24, 2024 and sell it today you would lose (237.00) from holding Lifeway Foods or give up 8.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edible Garden AG vs. Lifeway Foods
Performance |
| Timeline |
| Edible Garden AG |
| Lifeway Foods |
Edible Garden and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edible Garden and Lifeway Foods
The main advantage of trading using opposite Edible Garden and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden 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.| Edible Garden vs. Golden Agri Resources | Edible Garden vs. Vital Farms | Edible Garden vs. Local Bounti Corp | Edible Garden vs. Fresh Del Monte |
| Lifeway Foods vs. Bellring Brands LLC | Lifeway Foods vs. Treehouse Foods | Lifeway Foods vs. Ingredion Incorporated | Lifeway Foods vs. JM Smucker |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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