Correlation Between Lifeway Foods and Public Storage
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Public Storage 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 Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Public Storage, you can compare the effects of market volatilities on Lifeway Foods and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Public Storage.
Diversification Opportunities for Lifeway Foods and Public Storage
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lifeway and Public is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Public Storage go up and down completely randomly.
Pair Corralation between Lifeway Foods and Public Storage
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the Public Storage. In addition to that, Lifeway Foods is 3.27 times more volatile than Public Storage. It trades about -0.01 of its total potential returns per unit of risk. Public Storage is currently generating about 0.22 per unit of volatility. If you would invest 30,780 in Public Storage on September 1, 2024 and sell it today you would earn a total of 2,540 from holding Public Storage or generate 8.25% 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. Public Storage
Performance |
| Timeline |
| Lifeway Foods |
| Public Storage |
Lifeway Foods and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Public Storage
The main advantage of trading using opposite Lifeway Foods and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Lifeway Foods vs. ScanSource | Lifeway Foods vs. Waste Management | Lifeway Foods vs. Brockhaus Capital Management | Lifeway Foods vs. Consolidated Communications Holdings |
| Public Storage vs. INDOFOOD AGRI RES | Public Storage vs. China BlueChemical | Public Storage vs. Lifeway Foods | Public Storage vs. TYSON FOODS A |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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