Correlation Between Lifeway Foods and Enter Air
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Enter Air 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 Enter Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Enter Air SA, you can compare the effects of market volatilities on Lifeway Foods and Enter Air 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 Enter Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Enter Air.
Diversification Opportunities for Lifeway Foods and Enter Air
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lifeway and Enter is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air SA 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 Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Enter Air go up and down completely randomly.
Pair Corralation between Lifeway Foods and Enter Air
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the Enter Air. But the stock apears to be less risky and, when comparing its historical volatility, Lifeway Foods is 1.54 times less risky than Enter Air. The stock trades about -0.01 of its potential returns per unit of risk. The Enter Air SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,224 in Enter Air SA on September 1, 2024 and sell it today you would lose (12.00) from holding Enter Air SA or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Enter Air SA
Performance |
| Timeline |
| Lifeway Foods |
| Enter Air SA |
Lifeway Foods and Enter Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Enter Air
The main advantage of trading using opposite Lifeway Foods and Enter Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Enter Air 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 Enter Air will offset losses from the drop in Enter Air's long position.| Lifeway Foods vs. ScanSource | Lifeway Foods vs. Waste Management | Lifeway Foods vs. Brockhaus Capital Management | Lifeway Foods vs. Consolidated Communications Holdings |
| Enter Air vs. AUSNUTRIA DAIRY | Enter Air vs. NIPPON MEAT PACKERS | Enter Air vs. Lifeway Foods | Enter Air vs. TreeHouse 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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