Correlation Between Glanbia Plc and Lamb Weston
Can any of the company-specific risk be diversified away by investing in both Glanbia Plc 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 Glanbia Plc and Lamb Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glanbia plc and Lamb Weston Holdings, you can compare the effects of market volatilities on Glanbia Plc 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 Glanbia Plc with a short position of Lamb Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glanbia Plc and Lamb Weston.
Diversification Opportunities for Glanbia Plc and Lamb Weston
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Glanbia and Lamb is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Glanbia plc 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 Glanbia Plc 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 Glanbia plc 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 Glanbia Plc i.e., Glanbia Plc and Lamb Weston go up and down completely randomly.
Pair Corralation between Glanbia Plc and Lamb Weston
Assuming the 90 days horizon Glanbia plc is expected to generate 0.37 times more return on investment than Lamb Weston. However, Glanbia plc is 2.68 times less risky than Lamb Weston. It trades about 0.29 of its potential returns per unit of risk. Lamb Weston Holdings is currently generating about -0.04 per unit of risk. If you would invest 1,383 in Glanbia plc on November 9, 2024 and sell it today you would earn a total of 58.00 from holding Glanbia plc or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glanbia plc vs. Lamb Weston Holdings
Performance |
| Timeline |
| Glanbia plc |
| Lamb Weston Holdings |
Glanbia Plc and Lamb Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glanbia Plc and Lamb Weston
The main advantage of trading using opposite Glanbia Plc and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glanbia Plc 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.| Glanbia Plc vs. Greencore Group PLC | Glanbia Plc vs. Seneca Foods Corp | Glanbia Plc vs. Nestle SA | Glanbia Plc vs. Lamb Weston Holdings |
| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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