Correlation Between Lifeway Foods and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and COSTCO WHOLESALE 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 COSTCO WHOLESALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on Lifeway Foods and COSTCO WHOLESALE 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 COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and COSTCO WHOLESALE.
Diversification Opportunities for Lifeway Foods and COSTCO WHOLESALE
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifeway and COSTCO is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and COSTCO WHOLESALE CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTCO WHOLESALE CDR has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between Lifeway Foods and COSTCO WHOLESALE
Assuming the 90 days horizon Lifeway Foods is expected to generate 2.51 times more return on investment than COSTCO WHOLESALE. However, Lifeway Foods is 2.51 times more volatile than COSTCO WHOLESALE CDR. It trades about 0.08 of its potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about 0.08 per unit of risk. 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 Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lifeway Foods vs. COSTCO WHOLESALE CDR
Performance |
Timeline |
Lifeway Foods |
COSTCO WHOLESALE CDR |
Lifeway Foods and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lifeway Foods and COSTCO WHOLESALE
The main advantage of trading using opposite Lifeway Foods and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, COSTCO WHOLESALE 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 COSTCO WHOLESALE will offset losses from the drop in COSTCO WHOLESALE's long position.Lifeway Foods vs. Mowi ASA | Lifeway Foods vs. LEROY SEAFOOD GRUNSPADR | Lifeway Foods vs. Lery Seafood Group | Lifeway Foods vs. Nisshin Seifun Group |
COSTCO WHOLESALE vs. LEGACY IRON ORE | COSTCO WHOLESALE vs. CECO ENVIRONMENTAL | COSTCO WHOLESALE vs. BlueScope Steel Limited | COSTCO WHOLESALE vs. United States Steel |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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