Correlation Between Lifeway Foods and Bilibili

Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Bilibili 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 Bilibili into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lifeway Foods and Bilibili, you can compare the effects of market volatilities on Lifeway Foods and Bilibili 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 Bilibili. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Bilibili.

Diversification Opportunities for Lifeway Foods and Bilibili

0.32

Correlation Coefficient

Lifeway Foods  Bilibili

Weak diversification

The 3 months correlation between Lifeway and Bilibili is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili 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 Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Bilibili go up and down completely randomly.

Pair Corralation between Lifeway Foods and Bilibili

Assuming the 90 days horizon Lifeway Foods is expected to generate 1.17 times more return on investment than Bilibili. However, Lifeway Foods is 1.17 times more volatile than Bilibili. It trades about 0.08 of its potential returns per unit of risk. Bilibili is currently generating about 0.0 per unit of risk. If you would invest  486.00  in Lifeway Foods on October 23, 2024 and sell it today you would earn a total of  1,694  from holding Lifeway Foods or generate 348.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lifeway Foods  vs.  Bilibili

Lifeway Foods

Risk-Adjusted Performance

0 of 100

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.

Bilibili

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bilibili has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Lifeway Foods and Bilibili

The main advantage of trading using opposite Lifeway Foods and Bilibili positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Bilibili 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 Bilibili will offset losses from the drop in Bilibili's long position.

The idea behind Lifeway Foods and Bilibili 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.