Correlation Between Lifeway Foods and UNITED INTERNET

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

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

Diversification Opportunities for Lifeway Foods and UNITED INTERNET

0.25

Correlation Coefficient

Lifeway Foods  UNITED INTERNET

Modest diversification

The 3 months correlation between Lifeway and UNITED is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and UNITED INTERNET N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED INTERNET N 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 UNITED INTERNET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED INTERNET N has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and UNITED INTERNET go up and down completely randomly.

Pair Corralation between Lifeway Foods and UNITED INTERNET

Assuming the 90 days horizon Lifeway Foods is expected to generate 7.44 times less return on investment than UNITED INTERNET. But when comparing it to its historical volatility, Lifeway Foods is 1.22 times less risky than UNITED INTERNET. It trades about 0.04 of its potential returns per unit of risk. UNITED INTERNET N is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,745  in UNITED INTERNET N on April 23, 2025 and sell it today you would earn a total of  749.00  from holding UNITED INTERNET N or generate 42.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lifeway Foods  vs.  UNITED INTERNET N

Lifeway Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lifeway Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Lifeway Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

UNITED INTERNET N

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UNITED INTERNET N are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, UNITED INTERNET unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifeway Foods and UNITED INTERNET

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

The idea behind Lifeway Foods and UNITED INTERNET N 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.