Correlation Between ADRIATIC METALS and Lifeway Foods

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Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS 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 ADRIATIC METALS and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and Lifeway Foods, you can compare the effects of market volatilities on ADRIATIC METALS 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 ADRIATIC METALS with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and Lifeway Foods.

Diversification Opportunities for ADRIATIC METALS and Lifeway Foods

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between ADRIATIC and Lifeway is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 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 ADRIATIC METALS i.e., ADRIATIC METALS and Lifeway Foods go up and down completely randomly.

Pair Corralation between ADRIATIC METALS and Lifeway Foods

Assuming the 90 days trading horizon ADRIATIC METALS is expected to generate 3.41 times less return on investment than Lifeway Foods. But when comparing it to its historical volatility, ADRIATIC METALS LS 013355 is 1.51 times less risky than Lifeway Foods. It trades about 0.04 of its potential returns per unit of risk. Lifeway Foods is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  560.00  in Lifeway Foods on October 24, 2024 and sell it today you would earn a total of  1,620  from holding Lifeway Foods or generate 289.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ADRIATIC METALS LS 013355  vs.  Lifeway Foods

 Performance 
       Timeline  
ADRIATIC METALS LS 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in ADRIATIC METALS LS 013355 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ADRIATIC METALS may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Lifeway Foods 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lifeway Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ADRIATIC METALS and Lifeway Foods Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ADRIATIC METALS and Lifeway Foods

The main advantage of trading using opposite ADRIATIC METALS and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS 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.
The idea behind ADRIATIC METALS LS 013355 and Lifeway Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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