Correlation Between Herbalife Nutrition and Lamb Weston
Can any of the company-specific risk be diversified away by investing in both Herbalife Nutrition 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 Herbalife Nutrition and Lamb Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herbalife Nutrition and Lamb Weston Holdings, you can compare the effects of market volatilities on Herbalife Nutrition 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 Herbalife Nutrition with a short position of Lamb Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herbalife Nutrition and Lamb Weston.
Diversification Opportunities for Herbalife Nutrition and Lamb Weston
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Herbalife and Lamb is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Herbalife Nutrition 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 Herbalife Nutrition 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 Herbalife Nutrition 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 Herbalife Nutrition i.e., Herbalife Nutrition and Lamb Weston go up and down completely randomly.
Pair Corralation between Herbalife Nutrition and Lamb Weston
Considering the 90-day investment horizon Herbalife Nutrition is expected to under-perform the Lamb Weston. In addition to that, Herbalife Nutrition is 1.1 times more volatile than Lamb Weston Holdings. It trades about -0.06 of its total potential returns per unit of risk. Lamb Weston Holdings is currently generating about -0.01 per unit of volatility. If you would invest 8,531 in Lamb Weston Holdings on September 2, 2024 and sell it today you would lose (807.00) from holding Lamb Weston Holdings or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herbalife Nutrition vs. Lamb Weston Holdings
Performance |
| Timeline |
| Herbalife Nutrition |
| Lamb Weston Holdings |
Herbalife Nutrition and Lamb Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herbalife Nutrition and Lamb Weston
The main advantage of trading using opposite Herbalife Nutrition and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herbalife Nutrition 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.| Herbalife Nutrition vs. Nomad Foods | Herbalife Nutrition vs. Bellring Brands LLC | Herbalife Nutrition vs. Pilgrims Pride Corp | Herbalife Nutrition vs. Ingredion Incorporated |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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