Correlation Between Lifeway Foods and Japan Medical
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Japan Medical 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 Japan Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Japan Medical Dynamic, you can compare the effects of market volatilities on Lifeway Foods and Japan Medical 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 Japan Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Japan Medical.
Diversification Opportunities for Lifeway Foods and Japan Medical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lifeway and Japan is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Japan Medical Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Medical Dynamic 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 Japan Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Medical Dynamic has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Japan Medical go up and down completely randomly.
Pair Corralation between Lifeway Foods and Japan Medical
Assuming the 90 days horizon Lifeway Foods is expected to generate 1.48 times more return on investment than Japan Medical. However, Lifeway Foods is 1.48 times more volatile than Japan Medical Dynamic. It trades about -0.12 of its potential returns per unit of risk. Japan Medical Dynamic is currently generating about -0.2 per unit of risk. If you would invest 2,320 in Lifeway Foods on September 24, 2024 and sell it today you would lose (120.00) from holding Lifeway Foods or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Japan Medical Dynamic
Performance |
| Timeline |
| Lifeway Foods |
| Japan Medical Dynamic |
Lifeway Foods and Japan Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Japan Medical
The main advantage of trading using opposite Lifeway Foods and Japan Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Japan Medical 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 Japan Medical will offset losses from the drop in Japan Medical's long position.| Lifeway Foods vs. Mowi ASA | Lifeway Foods vs. LEROY SEAFOOD GRUNSPADR | Lifeway Foods vs. Lery Seafood Group | Lifeway Foods vs. Nisshin Seifun Group |
| Japan Medical vs. Vulcan Materials | Japan Medical vs. Tower Semiconductor | Japan Medical vs. ON SEMICONDUCTOR | Japan Medical vs. Martin Marietta Materials |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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