Correlation Between China BlueChemical and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both China BlueChemical 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 China BlueChemical and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and Lifeway Foods, you can compare the effects of market volatilities on China BlueChemical 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 China BlueChemical with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and Lifeway Foods.
Diversification Opportunities for China BlueChemical and Lifeway Foods
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Lifeway is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and China BlueChemical 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 China BlueChemical 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 China BlueChemical i.e., China BlueChemical and Lifeway Foods go up and down completely randomly.
Pair Corralation between China BlueChemical and Lifeway Foods
Assuming the 90 days horizon China BlueChemical is expected to under-perform the Lifeway Foods. But the stock apears to be less risky and, when comparing its historical volatility, China BlueChemical is 1.76 times less risky than Lifeway Foods. The stock trades about -0.05 of its potential returns per unit of risk. The Lifeway Foods is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,440 in Lifeway Foods on August 28, 2024 and sell it today you would lose (140.00) from holding Lifeway Foods or give up 5.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
China BlueChemical vs. Lifeway Foods
Performance |
| Timeline |
| China BlueChemical |
| Lifeway Foods |
China BlueChemical and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and Lifeway Foods
The main advantage of trading using opposite China BlueChemical and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical 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.| China BlueChemical vs. CONAGRA FOODS | China BlueChemical vs. Clean Energy Fuels | China BlueChemical vs. Lifeway Foods | China BlueChemical vs. Austevoll Seafood ASA |
| Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. Origin Agritech | Lifeway Foods vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |