Correlation Between Lifeway Foods and Avita Medical
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods and Avita Medical 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 Avita Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Avita Medical, you can compare the effects of market volatilities on Lifeway Foods and Avita Medical 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 Avita Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Avita Medical.
Diversification Opportunities for Lifeway Foods and Avita Medical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifeway and Avita is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Avita Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avita Medical 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 Avita Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avita Medical has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Avita Medical go up and down completely randomly.
Pair Corralation between Lifeway Foods and Avita Medical
Given the investment horizon of 90 days Lifeway Foods is expected to generate 0.71 times more return on investment than Avita Medical. However, Lifeway Foods is 1.41 times less risky than Avita Medical. It trades about 0.01 of its potential returns per unit of risk. Avita Medical is currently generating about -0.04 per unit of risk. If you would invest 2,413 in Lifeway Foods on September 3, 2025 and sell it today you would lose (2.00) from holding Lifeway Foods or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Avita Medical
Performance |
| Timeline |
| Lifeway Foods |
| Avita Medical |
Lifeway Foods and Avita Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Avita Medical
The main advantage of trading using opposite Lifeway Foods and Avita Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods position performs unexpectedly, Avita Medical 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 Avita Medical will offset losses from the drop in Avita Medical's long position.| Lifeway Foods vs. Kellanova | Lifeway Foods vs. Lamb Weston Holdings | Lifeway Foods vs. Guangdong Guanghong Holdings | Lifeway Foods vs. Tootsie Roll Industries |
| Avita Medical vs. Astral Foods Limited | Avita Medical vs. Federal Home Loan | Avita Medical vs. TRI Pointe Homes | Avita Medical vs. Lifeway Foods |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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