Correlation Between LIFEWAY FOODS and KORIAN (KO2SG)
Can any of the company-specific risk be diversified away by investing in both LIFEWAY FOODS and KORIAN (KO2SG) 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 KORIAN (KO2SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFEWAY FOODS and KORIAN, you can compare the effects of market volatilities on LIFEWAY FOODS and KORIAN (KO2SG) 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 KORIAN (KO2SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and KORIAN (KO2SG).
Diversification Opportunities for LIFEWAY FOODS and KORIAN (KO2SG)
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between LIFEWAY and KORIAN is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and KORIAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORIAN (KO2SG) 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 KORIAN (KO2SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORIAN (KO2SG) has no effect on the direction of LIFEWAY FOODS i.e., LIFEWAY FOODS and KORIAN (KO2SG) go up and down completely randomly.
Pair Corralation between LIFEWAY FOODS and KORIAN (KO2SG)
Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 1.27 times more return on investment than KORIAN (KO2SG). However, LIFEWAY FOODS is 1.27 times more volatile than KORIAN. It trades about -0.02 of its potential returns per unit of risk. KORIAN is currently generating about -0.16 per unit of risk. If you would invest 2,340 in LIFEWAY FOODS on September 2, 2024 and sell it today you would lose (60.00) from holding LIFEWAY FOODS or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFEWAY FOODS vs. KORIAN
Performance |
| Timeline |
| LIFEWAY FOODS |
| KORIAN (KO2SG) |
LIFEWAY FOODS and KORIAN (KO2SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFEWAY FOODS and KORIAN (KO2SG)
The main advantage of trading using opposite LIFEWAY FOODS and KORIAN (KO2SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFEWAY FOODS position performs unexpectedly, KORIAN (KO2SG) 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 KORIAN (KO2SG) will offset losses from the drop in KORIAN (KO2SG)'s long position.| LIFEWAY FOODS vs. SIVERS SEMICONDUCTORS AB | LIFEWAY FOODS vs. Darden Restaurants | LIFEWAY FOODS vs. Reliance Steel Aluminum | LIFEWAY FOODS vs. Q2M Managementberatung AG |
| KORIAN (KO2SG) vs. EAT WELL INVESTMENT | KORIAN (KO2SG) vs. LIFEWAY FOODS | KORIAN (KO2SG) vs. CapitaLand Investment Limited | KORIAN (KO2SG) vs. New Residential Investment |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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