Correlation Between Grupo Bimbo and Lamb Weston
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and Lamb Weston 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 Grupo Bimbo and Lamb Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Bimbo SAB and Lamb Weston Holdings, you can compare the effects of market volatilities on Grupo Bimbo and Lamb Weston 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 Grupo Bimbo with a short position of Lamb Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and Lamb Weston.
Diversification Opportunities for Grupo Bimbo and Lamb Weston
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grupo and Lamb is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and Lamb Weston Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamb Weston Holdings and Grupo Bimbo 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 Grupo Bimbo SAB are associated (or correlated) with Lamb Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamb Weston Holdings has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and Lamb Weston go up and down completely randomly.
Pair Corralation between Grupo Bimbo and Lamb Weston
Assuming the 90 days horizon Grupo Bimbo SAB is expected to under-perform the Lamb Weston. In addition to that, Grupo Bimbo is 1.02 times more volatile than Lamb Weston Holdings. It trades about -0.24 of its total potential returns per unit of risk. Lamb Weston Holdings is currently generating about -0.16 per unit of volatility. If you would invest 8,099 in Lamb Weston Holdings on September 12, 2024 and sell it today you would lose (519.00) from holding Lamb Weston Holdings or give up 6.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Bimbo SAB vs. Lamb Weston Holdings
Performance |
| Timeline |
| Grupo Bimbo SAB |
| Lamb Weston Holdings |
Grupo Bimbo and Lamb Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Bimbo and Lamb Weston
The main advantage of trading using opposite Grupo Bimbo and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, Lamb Weston 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 Lamb Weston will offset losses from the drop in Lamb Weston's long position.| Grupo Bimbo vs. Treehouse Foods | Grupo Bimbo vs. Lancaster Colony | Grupo Bimbo vs. Utz Brands | Grupo Bimbo vs. Lamb Weston Holdings |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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