Correlation Between Lancaster Colony and Above Food
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and Above Food 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 Lancaster Colony and Above Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and Above Food Ingredients, you can compare the effects of market volatilities on Lancaster Colony and Above Food 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 Lancaster Colony with a short position of Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and Above Food.
Diversification Opportunities for Lancaster Colony and Above Food
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lancaster and Above is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Lancaster Colony 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 Lancaster Colony are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and Above Food go up and down completely randomly.
Pair Corralation between Lancaster Colony and Above Food
Given the investment horizon of 90 days Lancaster Colony is expected to generate 0.23 times more return on investment than Above Food. However, Lancaster Colony is 4.39 times less risky than Above Food. It trades about 0.01 of its potential returns per unit of risk. Above Food Ingredients is currently generating about -0.06 per unit of risk. If you would invest 19,375 in Lancaster Colony on November 27, 2024 and sell it today you would earn a total of 72.00 from holding Lancaster Colony or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.98% |
| Values | Daily Returns |
Lancaster Colony vs. Above Food Ingredients
Performance |
| Timeline |
| Lancaster Colony |
| Above Food Ingredients |
Lancaster Colony and Above Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and Above Food
The main advantage of trading using opposite Lancaster Colony and Above Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, Above Food 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 Above Food will offset losses from the drop in Above Food's long position.| Lancaster Colony vs. Treehouse Foods | Lancaster Colony vs. John B Sanfilippo | Lancaster Colony vs. Seneca Foods Corp | Lancaster Colony vs. Seneca Foods Corp |
| Above Food vs. Dennys Corp | Above Food vs. LB Foster | Above Food vs. Golden Energy Offshore | Above Food vs. Melco Resorts Entertainment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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