Correlation Between LIFEWAY FOODS and GREENX METALS

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

By analyzing existing cross correlation between LIFEWAY FOODS and GREENX METALS LTD, you can compare the effects of market volatilities on LIFEWAY FOODS and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and GREENX METALS.

Diversification Opportunities for LIFEWAY FOODS and GREENX METALS

-0.46

Correlation Coefficient

LIFEWAY FOODS  GREENX METALS

Very good diversification

The 3 months correlation between LIFEWAY and GREENX is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of LIFEWAY FOODS i.e., LIFEWAY FOODS and GREENX METALS go up and down completely randomly.

Pair Corralation between LIFEWAY FOODS and GREENX METALS

Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 9.03 times less return on investment than GREENX METALS. But when comparing it to its historical volatility, LIFEWAY FOODS is 1.45 times less risky than GREENX METALS. It trades about 0.01 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  41.00  in GREENX METALS LTD on December 30, 2024 and sell it today you would earn a total of  7.00  from holding GREENX METALS LTD or generate 17.07% return on investment over 90 days.

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

LIFEWAY FOODS  vs.  GREENX METALS LTD

LIFEWAY FOODS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LIFEWAY FOODS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, LIFEWAY FOODS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GREENX METALS LTD

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GREENX METALS LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, GREENX METALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LIFEWAY FOODS and GREENX METALS

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

The idea behind LIFEWAY FOODS and GREENX METALS LTD 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.

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.