Correlation Between LIFEWAY FOODS and Makita
Can any of the company-specific risk be diversified away by investing in both LIFEWAY FOODS and Makita 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 Makita into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFEWAY FOODS and Makita, you can compare the effects of market volatilities on LIFEWAY FOODS and Makita 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 Makita. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and Makita.
Diversification Opportunities for LIFEWAY FOODS and Makita
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LIFEWAY and Makita is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and Makita in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makita 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 Makita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makita has no effect on the direction of LIFEWAY FOODS i.e., LIFEWAY FOODS and Makita go up and down completely randomly.
Pair Corralation between LIFEWAY FOODS and Makita
Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 1.33 times more return on investment than Makita. However, LIFEWAY FOODS is 1.33 times more volatile than Makita. It trades about 0.09 of its potential returns per unit of risk. Makita is currently generating about -0.02 per unit of risk. If you would invest 1,770 in LIFEWAY FOODS on November 2, 2024 and sell it today you would earn a total of 450.00 from holding LIFEWAY FOODS or generate 25.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
LIFEWAY FOODS vs. Makita
Performance |
| Timeline |
| LIFEWAY FOODS |
| Makita |
LIFEWAY FOODS and Makita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFEWAY FOODS and Makita
The main advantage of trading using opposite LIFEWAY FOODS and Makita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFEWAY FOODS position performs unexpectedly, Makita 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 Makita will offset losses from the drop in Makita's long position.| LIFEWAY FOODS vs. DIVERSIFIED ROYALTY | LIFEWAY FOODS vs. SLR Investment Corp | LIFEWAY FOODS vs. New Residential Investment | LIFEWAY FOODS vs. Japan Asia Investment |
| Makita vs. Superior Plus Corp | Makita vs. Origin Agritech | Makita vs. Identiv | Makita vs. INTUITIVE SURGICAL |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |