Correlation Between PDS Biotechnology and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both PDS Biotechnology 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 PDS Biotechnology and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDS Biotechnology Corp and Lifeway Foods, you can compare the effects of market volatilities on PDS Biotechnology 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 PDS Biotechnology with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDS Biotechnology and Lifeway Foods.
Diversification Opportunities for PDS Biotechnology and Lifeway Foods
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PDS and Lifeway is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PDS Biotechnology Corp and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and PDS Biotechnology 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 PDS Biotechnology Corp 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 PDS Biotechnology i.e., PDS Biotechnology and Lifeway Foods go up and down completely randomly.
Pair Corralation between PDS Biotechnology and Lifeway Foods
Assuming the 90 days horizon PDS Biotechnology Corp is expected to under-perform the Lifeway Foods. In addition to that, PDS Biotechnology is 1.02 times more volatile than Lifeway Foods. It trades about -0.04 of its total potential returns per unit of risk. Lifeway Foods is currently generating about 0.08 per unit of volatility. If you would invest 520.00 in Lifeway Foods on October 11, 2024 and sell it today you would earn a total of 1,800 from holding Lifeway Foods or generate 346.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDS Biotechnology Corp vs. Lifeway Foods
Performance |
| Timeline |
| PDS Biotechnology Corp |
| Lifeway Foods |
PDS Biotechnology and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDS Biotechnology and Lifeway Foods
The main advantage of trading using opposite PDS Biotechnology and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDS Biotechnology 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.| PDS Biotechnology vs. NorAm Drilling AS | PDS Biotechnology vs. Zijin Mining Group | PDS Biotechnology vs. MAGNUM MINING EXP | PDS Biotechnology vs. GRIFFIN MINING LTD |
| Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. SIVERS SEMICONDUCTORS AB | Lifeway Foods vs. Talanx AG |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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