Correlation Between Lifeway Foods and John B
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and John B 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 John B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and John B Sanfilippo, you can compare the effects of market volatilities on Lifeway Foods and John B 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 John B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and John B.
Diversification Opportunities for Lifeway Foods and John B
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lifeway and John is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo 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 John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and John B go up and down completely randomly.
Pair Corralation between Lifeway Foods and John B
Given the investment horizon of 90 days Lifeway Foods is expected to generate 1.69 times more return on investment than John B. However, Lifeway Foods is 1.69 times more volatile than John B Sanfilippo. It trades about 0.06 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.09 per unit of risk. If you would invest 2,009 in Lifeway Foods on November 2, 2024 and sell it today you would earn a total of 347.00 from holding Lifeway Foods or generate 17.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. John B Sanfilippo
Performance |
| Timeline |
| Lifeway Foods |
| John B Sanfilippo |
Lifeway Foods and John B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and John B
The main advantage of trading using opposite Lifeway Foods and John B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, John B 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 John B will offset losses from the drop in John B's long position.| Lifeway Foods vs. Central Garden Pet | Lifeway Foods vs. Central Garden Pet | Lifeway Foods vs. Lifevantage | Lifeway Foods vs. Seneca Foods Corp |
| John B vs. Lancaster Colony | John B vs. Treehouse Foods | John B vs. Seneca Foods Corp | John B vs. J J Snack |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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