Correlation Between Lifeway Foods and SYSTEMAIR

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

By analyzing existing cross correlation between Lifeway Foods and SYSTEMAIR AB, you can compare the effects of market volatilities on Lifeway Foods and SYSTEMAIR 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 SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and SYSTEMAIR.

Diversification Opportunities for Lifeway Foods and SYSTEMAIR

-0.14

Correlation Coefficient

Lifeway Foods  SYSTEMAIR

Good diversification

The 3 months correlation between Lifeway and SYSTEMAIR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB 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 SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and SYSTEMAIR go up and down completely randomly.

Pair Corralation between Lifeway Foods and SYSTEMAIR

Assuming the 90 days horizon Lifeway Foods is expected to generate 1.92 times less return on investment than SYSTEMAIR. In addition to that, Lifeway Foods is 1.06 times more volatile than SYSTEMAIR AB. It trades about 0.07 of its total potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.15 per unit of volatility. If you would invest  684.00  in SYSTEMAIR AB on April 20, 2025 and sell it today you would earn a total of  129.00  from holding SYSTEMAIR AB or generate 18.86% 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.  SYSTEMAIR AB

Lifeway Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lifeway Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lifeway Foods may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SYSTEMAIR AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SYSTEMAIR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifeway Foods and SYSTEMAIR

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

The idea behind Lifeway Foods and SYSTEMAIR AB 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.