Correlation Between Lifeway Foods and Gaming
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Gaming 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 Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Gaming and Leisure, you can compare the effects of market volatilities on Lifeway Foods and Gaming 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 Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Gaming.
Diversification Opportunities for Lifeway Foods and Gaming
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lifeway and Gaming is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure 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 Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Gaming go up and down completely randomly.
Pair Corralation between Lifeway Foods and Gaming
Assuming the 90 days horizon Lifeway Foods is expected to generate 4.11 times more return on investment than Gaming. However, Lifeway Foods is 4.11 times more volatile than Gaming and Leisure. It trades about 0.08 of its potential returns per unit of risk. Gaming and Leisure is currently generating about 0.02 per unit of risk. If you would invest 505.00 in Lifeway Foods on October 25, 2024 and sell it today you would earn a total of 1,675 from holding Lifeway Foods or generate 331.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Gaming and Leisure
Performance |
| Timeline |
| Lifeway Foods |
| Gaming and Leisure |
Lifeway Foods and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Gaming
The main advantage of trading using opposite Lifeway Foods and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| Lifeway Foods vs. Cairo Communication SpA | Lifeway Foods vs. Playtech plc | Lifeway Foods vs. Ribbon Communications | Lifeway Foods vs. ASPEN TECHINC DL |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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