Correlation Between Lancaster Colony and Brasilagro Adr
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and Brasilagro Adr 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 Brasilagro Adr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and Brasilagro Adr, you can compare the effects of market volatilities on Lancaster Colony and Brasilagro Adr 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 Brasilagro Adr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and Brasilagro Adr.
Diversification Opportunities for Lancaster Colony and Brasilagro Adr
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lancaster and Brasilagro is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and Brasilagro Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brasilagro Adr 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 Brasilagro Adr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brasilagro Adr has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and Brasilagro Adr go up and down completely randomly.
Pair Corralation between Lancaster Colony and Brasilagro Adr
Given the investment horizon of 90 days Lancaster Colony is expected to generate 1.69 times more return on investment than Brasilagro Adr. However, Lancaster Colony is 1.69 times more volatile than Brasilagro Adr. It trades about 0.04 of its potential returns per unit of risk. Brasilagro Adr is currently generating about -0.06 per unit of risk. If you would invest 18,288 in Lancaster Colony on August 30, 2024 and sell it today you would earn a total of 317.00 from holding Lancaster Colony or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lancaster Colony vs. Brasilagro Adr
Performance |
| Timeline |
| Lancaster Colony |
| Brasilagro Adr |
Lancaster Colony and Brasilagro Adr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and Brasilagro Adr
The main advantage of trading using opposite Lancaster Colony and Brasilagro Adr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, Brasilagro Adr 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 Brasilagro Adr will offset losses from the drop in Brasilagro Adr'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 |
| Brasilagro Adr vs. Austevoll Seafood ASA | Brasilagro Adr vs. Golden Agri Resources | Brasilagro Adr vs. SalMar ASA | Brasilagro Adr vs. Wilmar International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |