Correlation Between LIFEWAY FOODS and CSL
Can any of the company-specific risk be diversified away by investing in both LIFEWAY FOODS and CSL 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 CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFEWAY FOODS and CSL LTD SPONADR, you can compare the effects of market volatilities on LIFEWAY FOODS and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and CSL.
Diversification Opportunities for LIFEWAY FOODS and CSL
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LIFEWAY and CSL is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of LIFEWAY FOODS i.e., LIFEWAY FOODS and CSL go up and down completely randomly.
Pair Corralation between LIFEWAY FOODS and CSL
Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 4.3 times more return on investment than CSL. However, LIFEWAY FOODS is 4.3 times more volatile than CSL LTD SPONADR. It trades about 0.09 of its potential returns per unit of risk. CSL LTD SPONADR is currently generating about 0.02 per unit of risk. If you would invest 550.00 in LIFEWAY FOODS on September 24, 2024 and sell it today you would earn a total of 1,590 from holding LIFEWAY FOODS or generate 289.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFEWAY FOODS vs. CSL LTD SPONADR
Performance |
| Timeline |
| LIFEWAY FOODS |
| CSL LTD SPONADR |
LIFEWAY FOODS and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFEWAY FOODS and CSL
The main advantage of trading using opposite LIFEWAY FOODS and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFEWAY FOODS position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| LIFEWAY FOODS vs. Apple Inc | LIFEWAY FOODS vs. Apple Inc | LIFEWAY FOODS vs. Apple Inc | LIFEWAY FOODS vs. Apple Inc |
| CSL vs. LIFEWAY FOODS | CSL vs. National Beverage Corp | CSL vs. Thai Beverage Public | CSL vs. National Retail Properties |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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