Correlation Between Lifeway Foods and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Vishay Intertechnology 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 Vishay Intertechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Vishay Intertechnology, you can compare the effects of market volatilities on Lifeway Foods and Vishay Intertechnology 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 Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Vishay Intertechnology.
Diversification Opportunities for Lifeway Foods and Vishay Intertechnology
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lifeway and Vishay is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between Lifeway Foods and Vishay Intertechnology
Assuming the 90 days horizon Lifeway Foods is expected to generate 1.54 times more return on investment than Vishay Intertechnology. However, Lifeway Foods is 1.54 times more volatile than Vishay Intertechnology. It trades about 0.09 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.06 per unit of risk. If you would invest 1,920 in Lifeway Foods on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Lifeway Foods or generate 20.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lifeway Foods vs. Vishay Intertechnology
Performance |
Timeline |
Lifeway Foods |
Vishay Intertechnology |
Lifeway Foods and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lifeway Foods and Vishay Intertechnology
The main advantage of trading using opposite Lifeway Foods and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.Lifeway Foods vs. Hormel Foods | Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. SIVERS SEMICONDUCTORS AB | Lifeway Foods vs. NorAm Drilling AS |
Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |