Correlation Between Lifeway Foods and Paychex

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

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

Diversification Opportunities for Lifeway Foods and Paychex

-0.41

Correlation Coefficient

Lifeway Foods  Paychex

Very good diversification

The 3 months correlation between Lifeway and Paychex is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Paychex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paychex 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 Paychex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paychex has no effect on the direction of Lifeway Foods i.e., Lifeway Foods and Paychex go up and down completely randomly.

Pair Corralation between Lifeway Foods and Paychex

Assuming the 90 days horizon Lifeway Foods is expected to generate 2.5 times more return on investment than Paychex. However, Lifeway Foods is 2.5 times more volatile than Paychex. It trades about 0.05 of its potential returns per unit of risk. Paychex is currently generating about -0.19 per unit of risk. If you would invest  2,140  in Lifeway Foods on July 4, 2025 and sell it today you would earn a total of  140.00  from holding Lifeway Foods or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Lifeway Foods  vs.  Paychex

Lifeway Foods

Risk-Adjusted Performance

Soft

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 unsteady basic indicators, Lifeway Foods may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Paychex

Risk-Adjusted Performance

Weakest

Over the last 90 days Paychex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in November 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Lifeway Foods and Paychex

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

The idea behind Lifeway Foods and Paychex 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..