Correlation Between Lifeway Foods and VPower Group
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and VPower Group 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 VPower Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and VPower Group International, you can compare the effects of market volatilities on Lifeway Foods and VPower Group 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 VPower Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and VPower Group.
Diversification Opportunities for Lifeway Foods and VPower Group
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lifeway and VPower is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and VPower Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VPower Group Interna 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 VPower Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VPower Group Interna has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and VPower Group go up and down completely randomly.
Pair Corralation between Lifeway Foods and VPower Group
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the VPower Group. But the stock apears to be less risky and, when comparing its historical volatility, Lifeway Foods is 6.99 times less risky than VPower Group. The stock trades about -0.06 of its potential returns per unit of risk. The VPower Group International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.10 in VPower Group International on October 14, 2024 and sell it today you would lose (0.10) from holding VPower Group International or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. VPower Group International
Performance |
| Timeline |
| Lifeway Foods |
| VPower Group Interna |
Lifeway Foods and VPower Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and VPower Group
The main advantage of trading using opposite Lifeway Foods and VPower Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, VPower Group 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 VPower Group will offset losses from the drop in VPower Group's long position.| Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. SIVERS SEMICONDUCTORS AB | Lifeway Foods vs. Talanx AG |
| VPower Group vs. Vienna Insurance Group | VPower Group vs. Urban Outfitters | VPower Group vs. REVO INSURANCE SPA | VPower Group vs. Universal Insurance Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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