Correlation Between HireRight Holdings and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both HireRight Holdings 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 HireRight Holdings and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HireRight Holdings Corp and Lifeway Foods, you can compare the effects of market volatilities on HireRight Holdings 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 HireRight Holdings with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of HireRight Holdings and Lifeway Foods.
Diversification Opportunities for HireRight Holdings and Lifeway Foods
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HireRight and Lifeway is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding HireRight Holdings Corp and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and HireRight Holdings 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 HireRight Holdings 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 HireRight Holdings i.e., HireRight Holdings and Lifeway Foods go up and down completely randomly.
Pair Corralation between HireRight Holdings and Lifeway Foods
Considering the 90-day investment horizon HireRight Holdings is expected to generate 3.74 times less return on investment than Lifeway Foods. But when comparing it to its historical volatility, HireRight Holdings Corp is 2.19 times less risky than Lifeway Foods. It trades about 0.05 of its potential returns per unit of risk. Lifeway Foods is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 601.00 in Lifeway Foods on August 24, 2024 and sell it today you would earn a total of 1,825 from holding Lifeway Foods or generate 303.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.18% |
| Values | Daily Returns |
HireRight Holdings Corp vs. Lifeway Foods
Performance |
| Timeline |
| HireRight Holdings Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lifeway Foods |
HireRight Holdings and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HireRight Holdings and Lifeway Foods
The main advantage of trading using opposite HireRight Holdings and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HireRight Holdings 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.| HireRight Holdings vs. Hudson Global | HireRight Holdings vs. Mastech Holdings | HireRight Holdings vs. Kforce Inc | HireRight Holdings vs. Kelly Services A |
| Lifeway Foods vs. Bellring Brands LLC | Lifeway Foods vs. Treehouse Foods | Lifeway Foods vs. Ingredion Incorporated | Lifeway Foods vs. JM Smucker |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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