Correlation Between Lifeway Foods and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Stanley Electric 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 Stanley Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Stanley Electric Co, you can compare the effects of market volatilities on Lifeway Foods and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Stanley Electric.
Diversification Opportunities for Lifeway Foods and Stanley Electric
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lifeway and Stanley is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Stanley Electric go up and down completely randomly.
Pair Corralation between Lifeway Foods and Stanley Electric
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the Stanley Electric. In addition to that, Lifeway Foods is 2.84 times more volatile than Stanley Electric Co. It trades about -0.01 of its total potential returns per unit of risk. Stanley Electric Co is currently generating about 0.2 per unit of volatility. If you would invest 1,530 in Stanley Electric Co on October 23, 2024 and sell it today you would earn a total of 40.00 from holding Stanley Electric Co or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Stanley Electric Co
Performance |
| Timeline |
| Lifeway Foods |
| Stanley Electric |
Lifeway Foods and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Stanley Electric
The main advantage of trading using opposite Lifeway Foods and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| Lifeway Foods vs. STMicroelectronics NV | Lifeway Foods vs. STMICROELECTRONICS | Lifeway Foods vs. Hyrican Informationssysteme Aktiengesellschaft | Lifeway Foods vs. Delta Electronics Public |
| Stanley Electric vs. Lifeway Foods | Stanley Electric vs. TIANDE CHEMICAL | Stanley Electric vs. Silicon Motion Technology | Stanley Electric vs. CN MODERN DAIRY |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |