Correlation Between Compagnie Plastic and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and LIFEWAY FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and LIFEWAY FOODS, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and LIFEWAY FOODS.
Diversification Opportunities for Compagnie Plastic and LIFEWAY FOODS
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Compagnie and LIFEWAY is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY FOODS and Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between Compagnie Plastic and LIFEWAY FOODS
Assuming the 90 days horizon Compagnie Plastic is expected to generate 21.24 times less return on investment than LIFEWAY FOODS. But when comparing it to its historical volatility, Compagnie Plastic Omnium is 1.13 times less risky than LIFEWAY FOODS. It trades about 0.01 of its potential returns per unit of risk. LIFEWAY FOODS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,680 in LIFEWAY FOODS on September 2, 2024 and sell it today you would earn a total of 600.00 from holding LIFEWAY FOODS or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. LIFEWAY FOODS
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| LIFEWAY FOODS |
Compagnie Plastic and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and LIFEWAY FOODS
The main advantage of trading using opposite Compagnie Plastic and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. PT Astra International | Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. Origin Agritech |
| LIFEWAY FOODS vs. SIVERS SEMICONDUCTORS AB | LIFEWAY FOODS vs. Darden Restaurants | LIFEWAY FOODS vs. Reliance Steel Aluminum | LIFEWAY FOODS vs. Q2M Managementberatung 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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