Correlation Between Lifeway Foods and UNIV HEALTH
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and UNIV HEALTH 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 UNIV HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and UNIV HEALTH SERV B, you can compare the effects of market volatilities on Lifeway Foods and UNIV HEALTH 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 UNIV HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and UNIV HEALTH.
Diversification Opportunities for Lifeway Foods and UNIV HEALTH
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifeway and UNIV is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and UNIV HEALTH SERV B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIV HEALTH SERV 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 UNIV HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIV HEALTH SERV has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and UNIV HEALTH go up and down completely randomly.
Pair Corralation between Lifeway Foods and UNIV HEALTH
Assuming the 90 days horizon Lifeway Foods is expected to generate 1.86 times more return on investment than UNIV HEALTH. However, Lifeway Foods is 1.86 times more volatile than UNIV HEALTH SERV B. It trades about 0.12 of its potential returns per unit of risk. UNIV HEALTH SERV B is currently generating about -0.06 per unit of risk. If you would invest 1,790 in Lifeway Foods on August 31, 2024 and sell it today you would earn a total of 550.00 from holding Lifeway Foods or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. UNIV HEALTH SERV B
Performance |
| Timeline |
| Lifeway Foods |
| UNIV HEALTH SERV |
Lifeway Foods and UNIV HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and UNIV HEALTH
The main advantage of trading using opposite Lifeway Foods and UNIV HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, UNIV HEALTH 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 UNIV HEALTH will offset losses from the drop in UNIV HEALTH's long position.| Lifeway Foods vs. Danone SA | Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. Origin Agritech |
| UNIV HEALTH vs. Zijin Mining Group | UNIV HEALTH vs. NXP Semiconductors NV | UNIV HEALTH vs. Taiwan Semiconductor Manufacturing | UNIV HEALTH vs. Calibre Mining 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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