Correlation Between Lifeway Foods and HEALTHCARE REAL
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and HEALTHCARE REAL 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 HEALTHCARE REAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and HEALTHCARE REAL A, you can compare the effects of market volatilities on Lifeway Foods and HEALTHCARE REAL 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 HEALTHCARE REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and HEALTHCARE REAL.
Diversification Opportunities for Lifeway Foods and HEALTHCARE REAL
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lifeway and HEALTHCARE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and HEALTHCARE REAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE REAL A 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 HEALTHCARE REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE REAL A has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and HEALTHCARE REAL go up and down completely randomly.
Pair Corralation between Lifeway Foods and HEALTHCARE REAL
Assuming the 90 days horizon Lifeway Foods is expected to generate 1.17 times less return on investment than HEALTHCARE REAL. In addition to that, Lifeway Foods is 3.16 times more volatile than HEALTHCARE REAL A. It trades about 0.08 of its total potential returns per unit of risk. HEALTHCARE REAL A is currently generating about 0.3 per unit of volatility. If you would invest 1,541 in HEALTHCARE REAL A on September 3, 2024 and sell it today you would earn a total of 159.00 from holding HEALTHCARE REAL A or generate 10.32% 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. HEALTHCARE REAL A
Performance |
| Timeline |
| Lifeway Foods |
| HEALTHCARE REAL A |
Lifeway Foods and HEALTHCARE REAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and HEALTHCARE REAL
The main advantage of trading using opposite Lifeway Foods and HEALTHCARE REAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, HEALTHCARE REAL 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 HEALTHCARE REAL will offset losses from the drop in HEALTHCARE REAL's long position.| Lifeway Foods vs. Nestl SA | Lifeway Foods vs. Kraft Heinz Co | Lifeway Foods vs. General Mills | Lifeway Foods vs. Kellogg Company |
| HEALTHCARE REAL vs. Direct Line Insurance | HEALTHCARE REAL vs. HANOVER INSURANCE | HEALTHCARE REAL vs. QBE Insurance Group | HEALTHCARE REAL vs. MagnaChip Semiconductor Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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