Correlation Between Lifeway Foods and Whole Earth
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Whole Earth 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 Whole Earth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Whole Earth Brands, you can compare the effects of market volatilities on Lifeway Foods and Whole Earth 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 Whole Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Whole Earth.
Diversification Opportunities for Lifeway Foods and Whole Earth
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lifeway and Whole is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Whole Earth Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whole Earth Brands 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 Whole Earth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whole Earth Brands has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Whole Earth go up and down completely randomly.
Pair Corralation between Lifeway Foods and Whole Earth
If you would invest (100.00) in Whole Earth Brands on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Whole Earth Brands or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Lifeway Foods vs. Whole Earth Brands
Performance |
| Timeline |
| Lifeway Foods |
| Whole Earth Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lifeway Foods and Whole Earth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Whole Earth
The main advantage of trading using opposite Lifeway Foods and Whole Earth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Whole Earth 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 Whole Earth will offset losses from the drop in Whole Earth'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 |
| Whole Earth vs. Seneca Foods Corp | Whole Earth vs. Lifeway Foods | Whole Earth vs. John B Sanfilippo | Whole Earth vs. Real Good Food |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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