Correlation Between Lifeway Foods and Swiss Water
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Swiss Water 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 Swiss Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Swiss Water Decaffeinated, you can compare the effects of market volatilities on Lifeway Foods and Swiss Water 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 Swiss Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Swiss Water.
Diversification Opportunities for Lifeway Foods and Swiss Water
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lifeway and Swiss is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Swiss Water Decaffeinated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Water Decaffeinated 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 Swiss Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Water Decaffeinated has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Swiss Water go up and down completely randomly.
Pair Corralation between Lifeway Foods and Swiss Water
Given the investment horizon of 90 days Lifeway Foods is expected to generate 2.67 times more return on investment than Swiss Water. However, Lifeway Foods is 2.67 times more volatile than Swiss Water Decaffeinated. It trades about 0.08 of its potential returns per unit of risk. Swiss Water Decaffeinated is currently generating about 0.06 per unit of risk. If you would invest 1,262 in Lifeway Foods on August 29, 2024 and sell it today you would earn a total of 1,195 from holding Lifeway Foods or generate 94.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Lifeway Foods vs. Swiss Water Decaffeinated
Performance |
| Timeline |
| Lifeway Foods |
| Swiss Water Decaffeinated |
Lifeway Foods and Swiss Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Swiss Water
The main advantage of trading using opposite Lifeway Foods and Swiss Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Swiss Water 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 Swiss Water will offset losses from the drop in Swiss Water'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 |
| Swiss Water vs. Seneca Foods Corp | Swiss Water vs. Lifeway Foods | Swiss Water vs. John B Sanfilippo | Swiss Water 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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