Correlation Between Lancaster Colony and Orkla ASA
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and Orkla ASA 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 Orkla ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and Orkla ASA ADR, you can compare the effects of market volatilities on Lancaster Colony and Orkla ASA 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 Orkla ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and Orkla ASA.
Diversification Opportunities for Lancaster Colony and Orkla ASA
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lancaster and Orkla is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and Orkla ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orkla ASA 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 Orkla ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orkla ASA ADR has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and Orkla ASA go up and down completely randomly.
Pair Corralation between Lancaster Colony and Orkla ASA
Given the investment horizon of 90 days Lancaster Colony is expected to generate 1.15 times more return on investment than Orkla ASA. However, Lancaster Colony is 1.15 times more volatile than Orkla ASA ADR. It trades about 0.0 of its potential returns per unit of risk. Orkla ASA ADR is currently generating about -0.01 per unit of risk. If you would invest 18,732 in Lancaster Colony on September 5, 2024 and sell it today you would lose (69.00) from holding Lancaster Colony or give up 0.37% 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. Orkla ASA ADR
Performance |
| Timeline |
| Lancaster Colony |
| Orkla ASA ADR |
Lancaster Colony and Orkla ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and Orkla ASA
The main advantage of trading using opposite Lancaster Colony and Orkla ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, Orkla ASA 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 Orkla ASA will offset losses from the drop in Orkla ASA'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 |
| Orkla ASA vs. Kellanova | Orkla ASA vs. Lancaster Colony | Orkla ASA vs. The A2 Milk | Orkla ASA 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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