Correlation Between Lifeway Foods and VF

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and VF 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 VF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and VF Corporation, you can compare the effects of market volatilities on Lifeway Foods and VF 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 VF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and VF.

Diversification Opportunities for Lifeway Foods and VF

LifewayVFDiversified AwayLifewayVFDiversified Away100%
-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Lifeway and VF is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and VF Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF Corporation 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 VF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corporation has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and VF go up and down completely randomly.

Pair Corralation between Lifeway Foods and VF

Given the investment horizon of 90 days Lifeway Foods is expected to generate 2.4 times less return on investment than VF. In addition to that, Lifeway Foods is 1.46 times more volatile than VF Corporation. It trades about 0.03 of its total potential returns per unit of risk. VF Corporation is currently generating about 0.11 per unit of volatility. If you would invest  1,269  in VF Corporation on November 24, 2024 and sell it today you would earn a total of  1,282  from holding VF Corporation or generate 101.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Lifeway Foods  vs.  VF Corp.

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.15LWAY VFC
       Timeline  
Lifeway Foods 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Lifeway Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2122232425
VF Corporation 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, VF exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb202224262830

Lifeway Foods and VF Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.95-5.2-3.46-1.720.011.753.55.246.99 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15LWAY VFC
       Returns  

Pair Trading with Lifeway Foods and VF

The main advantage of trading using opposite Lifeway Foods and VF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, VF 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 VF will offset losses from the drop in VF's long position.
The idea behind Lifeway Foods and VF Corporation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Transaction History module to view history of all your transactions and understand their impact on performance.

Other Complementary Tools

Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Equity Valuation
Check real value of public entities based on technical and fundamental data
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities