Correlation Between Lifeway Foods and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Brockhaus Capital 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 Brockhaus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Brockhaus Capital Management, you can compare the effects of market volatilities on Lifeway Foods and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Brockhaus Capital.
Diversification Opportunities for Lifeway Foods and Brockhaus Capital
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifeway and Brockhaus is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Brockhaus Capital go up and down completely randomly.
Pair Corralation between Lifeway Foods and Brockhaus Capital
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the Brockhaus Capital. In addition to that, Lifeway Foods is 1.16 times more volatile than Brockhaus Capital Management. It trades about -0.06 of its total potential returns per unit of risk. Brockhaus Capital Management is currently generating about 0.14 per unit of volatility. If you would invest 2,340 in Brockhaus Capital Management on October 30, 2024 and sell it today you would earn a total of 110.00 from holding Brockhaus Capital Management or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Brockhaus Capital Management
Performance |
| Timeline |
| Lifeway Foods |
| Brockhaus Capital |
Lifeway Foods and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Brockhaus Capital
The main advantage of trading using opposite Lifeway Foods and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.| Lifeway Foods vs. General Mills | Lifeway Foods vs. Danone SA | Lifeway Foods vs. Hormel Foods | Lifeway Foods vs. Kellogg Company |
| Brockhaus Capital vs. United Natural Foods | Brockhaus Capital vs. Ebro Foods SA | Brockhaus Capital vs. Lery Seafood Group | Brockhaus Capital vs. CAL MAINE 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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