Correlation Between Lifeway Foods and Archer Daniels
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Archer Daniels 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 Lifeway Foods and Archer Daniels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Archer Daniels Midland, you can compare the effects of market volatilities on Lifeway Foods and Archer Daniels 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 Lifeway Foods with a short position of Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Archer Daniels.
Diversification Opportunities for Lifeway Foods and Archer Daniels
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifeway and Archer is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland and Lifeway 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 Lifeway Foods are associated (or correlated) with Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Archer Daniels go up and down completely randomly.
Pair Corralation between Lifeway Foods and Archer Daniels
Given the investment horizon of 90 days Lifeway Foods is expected to generate 3.03 times more return on investment than Archer Daniels. However, Lifeway Foods is 3.03 times more volatile than Archer Daniels Midland. It trades about 0.07 of its potential returns per unit of risk. Archer Daniels Midland is currently generating about -0.04 per unit of risk. If you would invest 680.00 in Lifeway Foods on August 24, 2024 and sell it today you would earn a total of 1,738 from holding Lifeway Foods or generate 255.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Archer Daniels Midland
Performance |
| Timeline |
| Lifeway Foods |
| Archer Daniels Midland |
Lifeway Foods and Archer Daniels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Archer Daniels
The main advantage of trading using opposite Lifeway Foods and Archer Daniels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Archer Daniels 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 Archer Daniels will offset losses from the drop in Archer Daniels' long position.| Lifeway Foods vs. Better Choice | Lifeway Foods vs. BioAdaptives | Lifeway Foods vs. Beyond Oil | Lifeway Foods vs. Bon Natural Life |
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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..
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