Correlation Between Lifeway Foods and COMBA TELECOM
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and COMBA TELECOM 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 COMBA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and COMBA TELECOM SYST, you can compare the effects of market volatilities on Lifeway Foods and COMBA TELECOM 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 COMBA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and COMBA TELECOM.
Diversification Opportunities for Lifeway Foods and COMBA TELECOM
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lifeway and COMBA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST 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 COMBA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMBA TELECOM SYST has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and COMBA TELECOM go up and down completely randomly.
Pair Corralation between Lifeway Foods and COMBA TELECOM
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the COMBA TELECOM. But the stock apears to be less risky and, when comparing its historical volatility, Lifeway Foods is 2.0 times less risky than COMBA TELECOM. The stock trades about -0.08 of its potential returns per unit of risk. The COMBA TELECOM SYST is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13.00 in COMBA TELECOM SYST on October 16, 2024 and sell it today you would earn a total of 0.00 from holding COMBA TELECOM SYST or generate 0.0% 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. COMBA TELECOM SYST
Performance |
| Timeline |
| Lifeway Foods |
| COMBA TELECOM SYST |
Lifeway Foods and COMBA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and COMBA TELECOM
The main advantage of trading using opposite Lifeway Foods and COMBA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, COMBA TELECOM 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 COMBA TELECOM will offset losses from the drop in COMBA TELECOM's long position.| Lifeway Foods vs. Plastic Omnium | Lifeway Foods vs. China Eastern Airlines | Lifeway Foods vs. Nok Airlines PCL | Lifeway Foods vs. JAPAN AIRLINES |
| COMBA TELECOM vs. Coor Service Management | COMBA TELECOM vs. GWILLI FOOD | COMBA TELECOM vs. Lifeway Foods | COMBA TELECOM vs. PLANT VEDA 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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