Correlation Between Lifeway Foods and Coty
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Coty 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 Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Coty Inc, you can compare the effects of market volatilities on Lifeway Foods and Coty 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 Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Coty.
Diversification Opportunities for Lifeway Foods and Coty
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifeway and Coty is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc 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 Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Coty go up and down completely randomly.
Pair Corralation between Lifeway Foods and Coty
Given the investment horizon of 90 days Lifeway Foods is expected to generate 1.74 times more return on investment than Coty. However, Lifeway Foods is 1.74 times more volatile than Coty Inc. It trades about 0.0 of its potential returns per unit of risk. Coty Inc is currently generating about -0.02 per unit of risk. If you would invest 2,475 in Lifeway Foods on September 3, 2024 and sell it today you would lose (30.00) from holding Lifeway Foods or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Coty Inc
Performance |
| Timeline |
| Lifeway Foods |
| Coty Inc |
Lifeway Foods and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Coty
The main advantage of trading using opposite Lifeway Foods and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Lifeway Foods vs. Seneca Foods Corp | Lifeway Foods vs. Central Garden Pet | Lifeway Foods vs. Central Garden Pet | Lifeway Foods vs. Lifevantage |
| Coty vs. Highway Holdings Limited | Coty vs. QCR Holdings | Coty vs. Partner Communications | Coty vs. Acumen Pharmaceuticals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |