Correlation Between LEROY SEAFOOD and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both LEROY SEAFOOD 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 LEROY SEAFOOD and Lifeway Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEROY SEAFOOD GRUNSPADR and Lifeway Foods, you can compare the effects of market volatilities on LEROY SEAFOOD 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 LEROY SEAFOOD with a short position of Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEROY SEAFOOD and Lifeway Foods.
Diversification Opportunities for LEROY SEAFOOD and Lifeway Foods
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LEROY and Lifeway is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding LEROY SEAFOOD GRUNSPADR and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods and LEROY SEAFOOD 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 LEROY SEAFOOD GRUNSPADR 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 LEROY SEAFOOD i.e., LEROY SEAFOOD and Lifeway Foods go up and down completely randomly.
Pair Corralation between LEROY SEAFOOD and Lifeway Foods
Assuming the 90 days trading horizon LEROY SEAFOOD GRUNSPADR is expected to under-perform the Lifeway Foods. But the stock apears to be less risky and, when comparing its historical volatility, LEROY SEAFOOD GRUNSPADR is 2.1 times less risky than Lifeway Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Lifeway Foods is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,890 in Lifeway Foods on September 23, 2024 and sell it today you would earn a total of 310.00 from holding Lifeway Foods or generate 16.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LEROY SEAFOOD GRUNSPADR vs. Lifeway Foods
Performance |
Timeline |
LEROY SEAFOOD GRUNSPADR |
Lifeway Foods |
LEROY SEAFOOD and Lifeway Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LEROY SEAFOOD and Lifeway Foods
The main advantage of trading using opposite LEROY SEAFOOD and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEROY SEAFOOD 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.LEROY SEAFOOD vs. GRIFFIN MINING LTD | LEROY SEAFOOD vs. Tradegate AG Wertpapierhandelsbank | LEROY SEAFOOD vs. Coeur Mining | LEROY SEAFOOD vs. REVO INSURANCE SPA |
Lifeway Foods vs. Mowi ASA | Lifeway Foods vs. LEROY SEAFOOD GRUNSPADR | Lifeway Foods vs. Lery Seafood Group | Lifeway Foods vs. Nisshin Seifun Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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