Correlation Between Lifeway Foods and AlzChem Group
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and AlzChem 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 AlzChem 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 AlzChem Group AG, you can compare the effects of market volatilities on Lifeway Foods and AlzChem 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 AlzChem Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and AlzChem Group.
Diversification Opportunities for Lifeway Foods and AlzChem Group
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifeway and AlzChem is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and AlzChem Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlzChem Group AG 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 AlzChem Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlzChem Group AG has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and AlzChem Group go up and down completely randomly.
Pair Corralation between Lifeway Foods and AlzChem Group
Assuming the 90 days horizon Lifeway Foods is expected to generate 1.86 times more return on investment than AlzChem Group. However, Lifeway Foods is 1.86 times more volatile than AlzChem Group AG. It trades about 0.12 of its potential returns per unit of risk. AlzChem Group AG is currently generating about 0.1 per unit of risk. If you would invest 1,130 in Lifeway Foods on October 26, 2024 and sell it today you would earn a total of 1,090 from holding Lifeway Foods or generate 96.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Lifeway Foods vs. AlzChem Group AG
Performance |
| Timeline |
| Lifeway Foods |
| AlzChem Group AG |
Lifeway Foods and AlzChem Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and AlzChem Group
The main advantage of trading using opposite Lifeway Foods and AlzChem Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, AlzChem 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 AlzChem Group will offset losses from the drop in AlzChem Group's long position.| Lifeway Foods vs. General Mills | Lifeway Foods vs. Danone SA | Lifeway Foods vs. Hormel Foods | Lifeway Foods vs. Kellogg Company |
| AlzChem Group vs. PURE FOODS TASMANIA | AlzChem Group vs. CAL MAINE FOODS | AlzChem Group vs. Cardinal Health | AlzChem Group vs. Lifeway 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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