Correlation Between Lifeway Foods and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Siemens Energy 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 Siemens Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Siemens Energy AG, you can compare the effects of market volatilities on Lifeway Foods and Siemens Energy 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 Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Siemens Energy.
Diversification Opportunities for Lifeway Foods and Siemens Energy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lifeway and Siemens is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy 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 Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Siemens Energy go up and down completely randomly.
Pair Corralation between Lifeway Foods and Siemens Energy
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the Siemens Energy. But the stock apears to be less risky and, when comparing its historical volatility, Lifeway Foods is 1.29 times less risky than Siemens Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Siemens Energy AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,987 in Siemens Energy AG on October 20, 2024 and sell it today you would earn a total of 193.00 from holding Siemens Energy AG or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Siemens Energy AG
Performance |
| Timeline |
| Lifeway Foods |
| Siemens Energy AG |
Lifeway Foods and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Siemens Energy
The main advantage of trading using opposite Lifeway Foods and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Siemens Energy 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 Siemens Energy will offset losses from the drop in Siemens Energy's long position.| Lifeway Foods vs. Tyson Foods | Lifeway Foods vs. TYSON FOODS A | Lifeway Foods vs. MTY Food Group | Lifeway Foods vs. Benchmark Electronics |
| Siemens Energy vs. CN YANGTPWR GDR | Siemens Energy vs. Vistra Corp | Siemens Energy vs. Datang International Power | Siemens Energy vs. Contact Energy Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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