Correlation Between Lifeway Foods and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Lifevantage 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 Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Lifevantage, you can compare the effects of market volatilities on Lifeway Foods and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Lifevantage.
Diversification Opportunities for Lifeway Foods and Lifevantage
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lifeway and Lifevantage is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Lifevantage go up and down completely randomly.
Pair Corralation between Lifeway Foods and Lifevantage
Given the investment horizon of 90 days Lifeway Foods is expected to generate 0.23 times more return on investment than Lifevantage. However, Lifeway Foods is 4.29 times less risky than Lifevantage. It trades about 0.01 of its potential returns per unit of risk. Lifevantage is currently generating about -0.23 per unit of risk. If you would invest 2,245 in Lifeway Foods on November 18, 2024 and sell it today you would earn a total of 2.00 from holding Lifeway Foods or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Lifevantage
Performance |
| Timeline |
| Lifeway Foods |
| Lifevantage |
Lifeway Foods and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Lifevantage
The main advantage of trading using opposite Lifeway Foods and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage'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 |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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