Correlation Between High Liner and Lamb Weston
Can any of the company-specific risk be diversified away by investing in both High Liner 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 High Liner and Lamb Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Liner Foods and Lamb Weston Holdings, you can compare the effects of market volatilities on High Liner 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 High Liner with a short position of Lamb Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Lamb Weston.
Diversification Opportunities for High Liner and Lamb Weston
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between High and Lamb is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods 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 High Liner 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 High Liner Foods 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 High Liner i.e., High Liner and Lamb Weston go up and down completely randomly.
Pair Corralation between High Liner and Lamb Weston
Assuming the 90 days horizon High Liner Foods is expected to generate 0.96 times more return on investment than Lamb Weston. However, High Liner Foods is 1.05 times less risky than Lamb Weston. It trades about 0.37 of its potential returns per unit of risk. Lamb Weston Holdings is currently generating about 0.0 per unit of risk. If you would invest 955.00 in High Liner Foods on August 31, 2024 and sell it today you would earn a total of 129.00 from holding High Liner Foods or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Lamb Weston Holdings
Performance |
| Timeline |
| High Liner Foods |
| Lamb Weston Holdings |
High Liner and Lamb Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Lamb Weston
The main advantage of trading using opposite High Liner and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner 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.| High Liner vs. Grupo Bimbo SAB | High Liner vs. Lamb Weston Holdings | High Liner vs. Kellanova | High Liner vs. Premier Foods Plc |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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