Correlation Between Lancaster Colony and Fraser
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and Fraser 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 Fraser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and Fraser and Neave, you can compare the effects of market volatilities on Lancaster Colony and Fraser 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 Fraser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and Fraser.
Diversification Opportunities for Lancaster Colony and Fraser
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lancaster and Fraser is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and Fraser and Neave in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fraser and Neave 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 Fraser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fraser and Neave has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and Fraser go up and down completely randomly.
Pair Corralation between Lancaster Colony and Fraser
If you would invest 18,732 in Lancaster Colony on September 4, 2024 and sell it today you would lose (2.00) from holding Lancaster Colony or give up 0.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lancaster Colony vs. Fraser and Neave
Performance |
| Timeline |
| Lancaster Colony |
| Fraser and Neave |
Lancaster Colony and Fraser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and Fraser
The main advantage of trading using opposite Lancaster Colony and Fraser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, Fraser 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 Fraser will offset losses from the drop in Fraser'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 |
| Fraser vs. Kellanova | Fraser vs. Lancaster Colony | Fraser vs. The A2 Milk | Fraser 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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