Correlation Between Hormel Foods and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Hormel 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 Hormel 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 Hormel Foods and Lifeway Foods, you can compare the effects of market volatilities on Hormel 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 Hormel Foods with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and Lifeway Foods.
Diversification Opportunities for Hormel Foods and Lifeway Foods
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hormel and Lifeway is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and Hormel 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 Hormel 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 Hormel Foods i.e., Hormel Foods and Lifeway Foods go up and down completely randomly.
Pair Corralation between Hormel Foods and Lifeway Foods
Assuming the 90 days horizon Hormel Foods is expected to generate 0.39 times more return on investment than Lifeway Foods. However, Hormel Foods is 2.54 times less risky than Lifeway Foods. It trades about 0.21 of its potential returns per unit of risk. Lifeway Foods is currently generating about 0.01 per unit of risk. If you would invest 2,893 in Hormel Foods on September 13, 2024 and sell it today you would earn a total of 235.00 from holding Hormel Foods or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. Lifeway Foods
Performance |
| Timeline |
| Hormel Foods |
| Lifeway Foods |
Hormel Foods and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and Lifeway Foods
The main advantage of trading using opposite Hormel Foods and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel 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' long position.| Hormel Foods vs. RYU Apparel | Hormel Foods vs. Microchip Technology Incorporated | Hormel Foods vs. Computer And Technologies | Hormel Foods vs. FANDIFI TECHNOLOGY P |
| Lifeway Foods vs. PennyMac Mortgage Investment | Lifeway Foods vs. Fukuyama Transporting Co | Lifeway Foods vs. Gladstone Investment | Lifeway Foods vs. Big 5 Sporting |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |