Correlation Between Lifeway Foods and Herman Miller
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Herman Miller 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 Herman Miller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Herman Miller, you can compare the effects of market volatilities on Lifeway Foods and Herman Miller 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 Herman Miller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Herman Miller.
Diversification Opportunities for Lifeway Foods and Herman Miller
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lifeway and Herman is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Herman Miller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herman Miller 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 Herman Miller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herman Miller has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Herman Miller go up and down completely randomly.
Pair Corralation between Lifeway Foods and Herman Miller
Assuming the 90 days horizon Lifeway Foods is expected to generate 0.5 times more return on investment than Herman Miller. However, Lifeway Foods is 1.99 times less risky than Herman Miller. It trades about 0.13 of its potential returns per unit of risk. Herman Miller is currently generating about -0.09 per unit of risk. If you would invest 2,300 in Lifeway Foods on October 7, 2024 and sell it today you would earn a total of 100.00 from holding Lifeway Foods or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Herman Miller
Performance |
| Timeline |
| Lifeway Foods |
| Herman Miller |
Lifeway Foods and Herman Miller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Herman Miller
The main advantage of trading using opposite Lifeway Foods and Herman Miller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Herman Miller 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 Herman Miller will offset losses from the drop in Herman Miller's long position.| Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. SIVERS SEMICONDUCTORS AB | Lifeway Foods vs. Talanx AG |
| Herman Miller vs. Canon Inc | Herman Miller vs. Canon Inc | Herman Miller vs. Ricoh Company | Herman Miller vs. Brother Industries |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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