Correlation Between Lifeway Foods and Griffon
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Griffon 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 Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Griffon, you can compare the effects of market volatilities on Lifeway Foods and Griffon 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 Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Griffon.
Diversification Opportunities for Lifeway Foods and Griffon
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifeway and Griffon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Griffon go up and down completely randomly.
Pair Corralation between Lifeway Foods and Griffon
Assuming the 90 days horizon Lifeway Foods is expected to generate 1.36 times more return on investment than Griffon. However, Lifeway Foods is 1.36 times more volatile than Griffon. It trades about -0.13 of its potential returns per unit of risk. Griffon is currently generating about -0.48 per unit of risk. If you would invest 2,340 in Lifeway Foods on September 28, 2024 and sell it today you would lose (120.00) from holding Lifeway Foods or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lifeway Foods vs. Griffon
Performance |
| Timeline |
| Lifeway Foods |
| Griffon |
Lifeway Foods and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Griffon
The main advantage of trading using opposite Lifeway Foods and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| Lifeway Foods vs. DELTA AIR LINES | Lifeway Foods vs. Air New Zealand | Lifeway Foods vs. MagnaChip Semiconductor Corp | Lifeway Foods vs. NXP Semiconductors NV |
| Griffon vs. Honeywell International | Griffon vs. Mitsubishi | Griffon vs. CITIC Limited | Griffon vs. CITIC LTD ADR5 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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