Correlation Between Lancaster Colony and Aryzta AG
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and Aryzta AG 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 Aryzta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and Aryzta AG PK, you can compare the effects of market volatilities on Lancaster Colony and Aryzta AG 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 Aryzta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and Aryzta AG.
Diversification Opportunities for Lancaster Colony and Aryzta AG
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lancaster and Aryzta is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and Aryzta AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG PK 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 Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG PK has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and Aryzta AG go up and down completely randomly.
Pair Corralation between Lancaster Colony and Aryzta AG
Given the investment horizon of 90 days Lancaster Colony is expected to generate 8.96 times less return on investment than Aryzta AG. But when comparing it to its historical volatility, Lancaster Colony is 1.43 times less risky than Aryzta AG. It trades about 0.01 of its potential returns per unit of risk. Aryzta AG PK is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Aryzta AG PK on September 5, 2024 and sell it today you would earn a total of 24.00 from holding Aryzta AG PK or generate 40.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lancaster Colony vs. Aryzta AG PK
Performance |
| Timeline |
| Lancaster Colony |
| Aryzta AG PK |
Lancaster Colony and Aryzta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and Aryzta AG
The main advantage of trading using opposite Lancaster Colony and Aryzta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, Aryzta AG 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 Aryzta AG will offset losses from the drop in Aryzta AG'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 |
| Aryzta AG vs. Kellanova | Aryzta AG vs. Lancaster Colony | Aryzta AG vs. The A2 Milk | Aryzta AG vs. Artisan Consumer Goods |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |