Correlation Between Lifeway Foods and INFORMATION SVC
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and INFORMATION SVC 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 INFORMATION SVC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and INFORMATION SVC GRP, you can compare the effects of market volatilities on Lifeway Foods and INFORMATION SVC 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 INFORMATION SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and INFORMATION SVC.
Diversification Opportunities for Lifeway Foods and INFORMATION SVC
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifeway and INFORMATION is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP 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 INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and INFORMATION SVC go up and down completely randomly.
Pair Corralation between Lifeway Foods and INFORMATION SVC
Assuming the 90 days horizon Lifeway Foods is expected to generate 1.73 times more return on investment than INFORMATION SVC. However, Lifeway Foods is 1.73 times more volatile than INFORMATION SVC GRP. It trades about -0.08 of its potential returns per unit of risk. INFORMATION SVC GRP is currently generating about -0.64 per unit of risk. If you would invest 2,300 in Lifeway Foods on October 14, 2024 and sell it today you would lose (80.00) from holding Lifeway Foods or give up 3.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lifeway Foods vs. INFORMATION SVC GRP
Performance |
Timeline |
Lifeway Foods |
INFORMATION SVC GRP |
Lifeway Foods and INFORMATION SVC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lifeway Foods and INFORMATION SVC
The main advantage of trading using opposite Lifeway Foods and INFORMATION SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, INFORMATION SVC 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 INFORMATION SVC will offset losses from the drop in INFORMATION SVC'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 |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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