Correlation Between SEKISUI CHEMICAL and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL and Lifeway Foods 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 SEKISUI CHEMICAL and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and Lifeway Foods, you can compare the effects of market volatilities on SEKISUI CHEMICAL and Lifeway Foods 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 SEKISUI CHEMICAL with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and Lifeway Foods.
Diversification Opportunities for SEKISUI CHEMICAL and Lifeway Foods
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEKISUI and Lifeway is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL are associated (or correlated) with Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and Lifeway Foods go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and Lifeway Foods
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 0.34 times more return on investment than Lifeway Foods. However, SEKISUI CHEMICAL is 2.97 times less risky than Lifeway Foods. It trades about 0.37 of its potential returns per unit of risk. Lifeway Foods is currently generating about 0.0 per unit of risk. If you would invest 1,290 in SEKISUI CHEMICAL on August 31, 2024 and sell it today you would earn a total of 200.00 from holding SEKISUI CHEMICAL or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEKISUI CHEMICAL vs. Lifeway Foods
Performance |
| Timeline |
| SEKISUI CHEMICAL |
| Lifeway Foods |
SEKISUI CHEMICAL and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEKISUI CHEMICAL and Lifeway Foods
The main advantage of trading using opposite SEKISUI CHEMICAL and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL position performs unexpectedly, Lifeway Foods 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 Lifeway Foods will offset losses from the drop in Lifeway Foods' long position.| SEKISUI CHEMICAL vs. SIVERS SEMICONDUCTORS AB | SEKISUI CHEMICAL vs. Darden Restaurants | SEKISUI CHEMICAL vs. Reliance Steel Aluminum | SEKISUI CHEMICAL vs. Q2M Managementberatung AG |
| Lifeway Foods vs. Danone SA | Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. Origin Agritech |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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