Correlation Between Lifeway Foods and HireRight Holdings
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and HireRight Holdings 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 HireRight Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and HireRight Holdings Corp, you can compare the effects of market volatilities on Lifeway Foods and HireRight Holdings 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 HireRight Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and HireRight Holdings.
Diversification Opportunities for Lifeway Foods and HireRight Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifeway and HireRight is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and HireRight Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HireRight Holdings Corp 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 HireRight Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HireRight Holdings Corp has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and HireRight Holdings go up and down completely randomly.
Pair Corralation between Lifeway Foods and HireRight Holdings
Given the investment horizon of 90 days Lifeway Foods is expected to generate 2.08 times more return on investment than HireRight Holdings. However, Lifeway Foods is 2.08 times more volatile than HireRight Holdings Corp. It trades about 0.07 of its potential returns per unit of risk. HireRight Holdings Corp is currently generating about 0.03 per unit of risk. If you would invest 669.00 in Lifeway Foods on August 28, 2024 and sell it today you would earn a total of 1,743 from holding Lifeway Foods or generate 260.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.99% |
| Values | Daily Returns |
Lifeway Foods vs. HireRight Holdings Corp
Performance |
| Timeline |
| Lifeway Foods |
| HireRight Holdings Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lifeway Foods and HireRight Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and HireRight Holdings
The main advantage of trading using opposite Lifeway Foods and HireRight Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, HireRight Holdings 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 HireRight Holdings will offset losses from the drop in HireRight Holdings' long position.| Lifeway Foods vs. Bellring Brands LLC | Lifeway Foods vs. Ingredion Incorporated | Lifeway Foods vs. Nomad Foods | Lifeway Foods vs. Simply Good Foods |
| HireRight Holdings vs. Hudson Global | HireRight Holdings vs. Mastech Holdings | HireRight Holdings vs. Kforce Inc | HireRight Holdings vs. Kelly Services A |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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