Correlation Between Lifeway Foods and VULCAN MATERIALS
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and VULCAN MATERIALS 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 VULCAN MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and VULCAN MATERIALS, you can compare the effects of market volatilities on Lifeway Foods and VULCAN MATERIALS 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 VULCAN MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and VULCAN MATERIALS.
Diversification Opportunities for Lifeway Foods and VULCAN MATERIALS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifeway and VULCAN is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and VULCAN MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VULCAN MATERIALS 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 VULCAN MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VULCAN MATERIALS has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and VULCAN MATERIALS go up and down completely randomly.
Pair Corralation between Lifeway Foods and VULCAN MATERIALS
Assuming the 90 days horizon Lifeway Foods is expected to generate 3.02 times more return on investment than VULCAN MATERIALS. However, Lifeway Foods is 3.02 times more volatile than VULCAN MATERIALS. It trades about 0.04 of its potential returns per unit of risk. VULCAN MATERIALS is currently generating about 0.01 per unit of risk. If you would invest 1,940 in Lifeway Foods on October 12, 2024 and sell it today you would earn a total of 280.00 from holding Lifeway Foods or generate 14.43% 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. VULCAN MATERIALS
Performance |
| Timeline |
| Lifeway Foods |
| VULCAN MATERIALS |
Lifeway Foods and VULCAN MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and VULCAN MATERIALS
The main advantage of trading using opposite Lifeway Foods and VULCAN MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, VULCAN MATERIALS 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 VULCAN MATERIALS will offset losses from the drop in VULCAN MATERIALS's long position.| Lifeway Foods vs. WT OFFSHORE | Lifeway Foods vs. SBM OFFSHORE | Lifeway Foods vs. Xenia Hotels Resorts | Lifeway Foods vs. Shenzhen Investment Limited |
| VULCAN MATERIALS vs. TERADATA | VULCAN MATERIALS vs. Cogent Communications Holdings | VULCAN MATERIALS vs. Cass Information Systems | VULCAN MATERIALS vs. Charter Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |