Correlation Between LIFEWAY FOODS and Suntory Beverage
Can any of the company-specific risk be diversified away by investing in both LIFEWAY FOODS and Suntory Beverage 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 Suntory Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFEWAY FOODS and Suntory Beverage Food, you can compare the effects of market volatilities on LIFEWAY FOODS and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and Suntory Beverage.
Diversification Opportunities for LIFEWAY FOODS and Suntory Beverage
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LIFEWAY and Suntory is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of LIFEWAY FOODS i.e., LIFEWAY FOODS and Suntory Beverage go up and down completely randomly.
Pair Corralation between LIFEWAY FOODS and Suntory Beverage
Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 1.89 times more return on investment than Suntory Beverage. However, LIFEWAY FOODS is 1.89 times more volatile than Suntory Beverage Food. It trades about 0.07 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about -0.12 per unit of risk. If you would invest 2,140 in LIFEWAY FOODS on October 25, 2024 and sell it today you would earn a total of 60.00 from holding LIFEWAY FOODS or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFEWAY FOODS vs. Suntory Beverage Food
Performance |
| Timeline |
| LIFEWAY FOODS |
| Suntory Beverage Food |
LIFEWAY FOODS and Suntory Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFEWAY FOODS and Suntory Beverage
The main advantage of trading using opposite LIFEWAY FOODS and Suntory Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFEWAY FOODS position performs unexpectedly, Suntory Beverage 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 Suntory Beverage will offset losses from the drop in Suntory Beverage's long position.| LIFEWAY FOODS vs. NXP Semiconductors NV | LIFEWAY FOODS vs. BE Semiconductor Industries | LIFEWAY FOODS vs. Elmos Semiconductor SE | LIFEWAY FOODS vs. ELMOS SEMICONDUCTOR |
| Suntory Beverage vs. Heineken NV | Suntory Beverage vs. HEINEKEN SP ADR | Suntory Beverage vs. Heineken Holding NV | Suntory Beverage vs. Carlsberg AS |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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