Correlation Between LIFEWAY FOODS and Apple
Can any of the company-specific risk be diversified away by investing in both LIFEWAY FOODS and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFEWAY FOODS and Apple Inc, you can compare the effects of market volatilities on LIFEWAY FOODS and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and Apple.
Diversification Opportunities for LIFEWAY FOODS and Apple
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LIFEWAY and Apple is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of LIFEWAY FOODS i.e., LIFEWAY FOODS and Apple go up and down completely randomly.
Pair Corralation between LIFEWAY FOODS and Apple
Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 1.78 times more return on investment than Apple. However, LIFEWAY FOODS is 1.78 times more volatile than Apple Inc. It trades about 0.09 of its potential returns per unit of risk. Apple Inc is currently generating about -0.46 per unit of risk. If you would invest 2,120 in LIFEWAY FOODS on October 24, 2024 and sell it today you would earn a total of 80.00 from holding LIFEWAY FOODS or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFEWAY FOODS vs. Apple Inc
Performance |
| Timeline |
| LIFEWAY FOODS |
| Apple Inc |
LIFEWAY FOODS and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFEWAY FOODS and Apple
The main advantage of trading using opposite LIFEWAY FOODS and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFEWAY FOODS position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple'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 |
| Apple vs. PEPTONIC MEDICAL | Apple vs. SMA Solar Technology | Apple vs. AECOM TECHNOLOGY | Apple vs. Medical Properties Trust |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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