Correlation Between Lancaster Colony and BranchOut Food
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and BranchOut 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 BranchOut 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 BranchOut Food Common, you can compare the effects of market volatilities on Lancaster Colony and BranchOut 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 BranchOut Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and BranchOut Food.
Diversification Opportunities for Lancaster Colony and BranchOut Food
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lancaster and BranchOut is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and BranchOut Food Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BranchOut Food Common 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 BranchOut Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BranchOut Food Common has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and BranchOut Food go up and down completely randomly.
Pair Corralation between Lancaster Colony and BranchOut Food
Given the investment horizon of 90 days Lancaster Colony is expected to generate 0.43 times more return on investment than BranchOut Food. However, Lancaster Colony is 2.31 times less risky than BranchOut Food. It trades about -0.07 of its potential returns per unit of risk. BranchOut Food Common is currently generating about -0.03 per unit of risk. If you would invest 19,470 in Lancaster Colony on September 12, 2024 and sell it today you would lose (473.00) from holding Lancaster Colony or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lancaster Colony vs. BranchOut Food Common
Performance |
| Timeline |
| Lancaster Colony |
| BranchOut Food Common |
Lancaster Colony and BranchOut Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and BranchOut Food
The main advantage of trading using opposite Lancaster Colony and BranchOut Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, BranchOut 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 BranchOut Food will offset losses from the drop in BranchOut Food's long position.| Lancaster Colony vs. J J Snack | Lancaster Colony vs. Central Garden Pet | Lancaster Colony vs. Central Garden Pet | Lancaster Colony vs. Treehouse Foods |
| BranchOut Food vs. J J Snack | BranchOut Food vs. Central Garden Pet | BranchOut Food vs. Central Garden Pet | BranchOut Food vs. Lancaster Colony |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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