Correlation Between LIFEWAY FOODS and GWILLI FOOD
Can any of the company-specific risk be diversified away by investing in both LIFEWAY FOODS and GWILLI FOOD 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 GWILLI FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFEWAY FOODS and GWILLI FOOD, you can compare the effects of market volatilities on LIFEWAY FOODS and GWILLI FOOD 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 GWILLI FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and GWILLI FOOD.
Diversification Opportunities for LIFEWAY FOODS and GWILLI FOOD
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LIFEWAY and GWILLI is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and GWILLI FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWILLI 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 GWILLI FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GWILLI FOOD has no effect on the direction of LIFEWAY FOODS i.e., LIFEWAY FOODS and GWILLI FOOD go up and down completely randomly.
Pair Corralation between LIFEWAY FOODS and GWILLI FOOD
Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 1.7 times more return on investment than GWILLI FOOD. However, LIFEWAY FOODS is 1.7 times more volatile than GWILLI FOOD. It trades about 0.07 of its potential returns per unit of risk. GWILLI FOOD is currently generating about -0.01 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFEWAY FOODS vs. GWILLI FOOD
Performance |
| Timeline |
| LIFEWAY FOODS |
| GWILLI FOOD |
LIFEWAY FOODS and GWILLI FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFEWAY FOODS and GWILLI FOOD
The main advantage of trading using opposite LIFEWAY FOODS and GWILLI FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFEWAY FOODS position performs unexpectedly, GWILLI FOOD 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 GWILLI FOOD will offset losses from the drop in GWILLI FOOD'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 |
| GWILLI FOOD vs. Titan Machinery | GWILLI FOOD vs. Australian Agricultural | GWILLI FOOD vs. Penta Ocean Construction Co | GWILLI FOOD vs. Major Drilling Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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