Correlation Between Flowers Foods and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both Flowers Foods 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 Flowers Foods and LIFEWAY FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowers Foods and LIFEWAY FOODS, you can compare the effects of market volatilities on Flowers Foods 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 Flowers Foods with a short position of LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowers Foods and LIFEWAY FOODS.
Diversification Opportunities for Flowers Foods and LIFEWAY FOODS
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flowers and LIFEWAY is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY FOODS and Flowers Foods 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 Flowers Foods 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 Flowers Foods i.e., Flowers Foods and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between Flowers Foods and LIFEWAY FOODS
Assuming the 90 days horizon Flowers Foods is expected to generate 0.68 times more return on investment than LIFEWAY FOODS. However, Flowers Foods is 1.47 times less risky than LIFEWAY FOODS. It trades about -0.14 of its potential returns per unit of risk. LIFEWAY FOODS is currently generating about -0.17 per unit of risk. If you would invest 1,940 in Flowers Foods on November 28, 2024 and sell it today you would lose (90.00) from holding Flowers Foods or give up 4.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Flowers Foods vs. LIFEWAY FOODS
Performance |
| Timeline |
| Flowers Foods |
| LIFEWAY FOODS |
Flowers Foods and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flowers Foods and LIFEWAY FOODS
The main advantage of trading using opposite Flowers Foods and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods 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.| Flowers Foods vs. MagnaChip Semiconductor Corp | Flowers Foods vs. UNITED UTILITIES GP | Flowers Foods vs. Jupiter Fund Management | Flowers Foods vs. CEOTRONICS |
| LIFEWAY FOODS vs. Hisense Home Appliances | LIFEWAY FOODS vs. PLANT VEDA FOODS | LIFEWAY FOODS vs. Sligro Food Group | LIFEWAY FOODS vs. CENTURIA OFFICE REIT |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |