Correlation Between Lifeway Foods and Dalata Hotel

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Dalata Hotel 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 Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Dalata Hotel Group, you can compare the effects of market volatilities on Lifeway Foods and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Dalata Hotel.

Diversification Opportunities for Lifeway Foods and Dalata Hotel

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Lifeway and Dalata is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Dalata Hotel go up and down completely randomly.

Pair Corralation between Lifeway Foods and Dalata Hotel

Assuming the 90 days horizon Lifeway Foods is expected to generate 2.44 times more return on investment than Dalata Hotel. However, Lifeway Foods is 2.44 times more volatile than Dalata Hotel Group. It trades about 0.09 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.09 per unit of risk. If you would invest  1,890  in Lifeway Foods on September 6, 2024 and sell it today you would earn a total of  390.00  from holding Lifeway Foods or generate 20.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Lifeway Foods  vs.  Dalata Hotel Group

 Performance 
       Timeline  
Lifeway Foods 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lifeway Foods are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lifeway Foods reported solid returns over the last few months and may actually be approaching a breakup point.
Dalata Hotel Group 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dalata Hotel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lifeway Foods and Dalata Hotel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lifeway Foods and Dalata Hotel

The main advantage of trading using opposite Lifeway Foods and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.
The idea behind Lifeway Foods and Dalata Hotel Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

Other Complementary Tools

Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios