Correlation Between Lancaster Colony and PlantFuel Life
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and PlantFuel Life 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 PlantFuel Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and PlantFuel Life, you can compare the effects of market volatilities on Lancaster Colony and PlantFuel Life 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 PlantFuel Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and PlantFuel Life.
Diversification Opportunities for Lancaster Colony and PlantFuel Life
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lancaster and PlantFuel is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and PlantFuel Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlantFuel Life 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 PlantFuel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlantFuel Life has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and PlantFuel Life go up and down completely randomly.
Pair Corralation between Lancaster Colony and PlantFuel Life
Given the investment horizon of 90 days Lancaster Colony is expected to generate 903.24 times less return on investment than PlantFuel Life. But when comparing it to its historical volatility, Lancaster Colony is 17.04 times less risky than PlantFuel Life. It trades about 0.0 of its potential returns per unit of risk. PlantFuel Life is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 87.00 in PlantFuel Life on September 7, 2024 and sell it today you would lose (86.00) from holding PlantFuel Life or give up 98.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lancaster Colony vs. PlantFuel Life
Performance |
| Timeline |
| Lancaster Colony |
| PlantFuel Life |
Lancaster Colony and PlantFuel Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and PlantFuel Life
The main advantage of trading using opposite Lancaster Colony and PlantFuel Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, PlantFuel Life 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 PlantFuel Life will offset losses from the drop in PlantFuel Life's long position.| Lancaster Colony vs. Treehouse Foods | Lancaster Colony vs. John B Sanfilippo | Lancaster Colony vs. Seneca Foods Corp | Lancaster Colony vs. J J Snack |
| PlantFuel Life vs. ConAgra Foods | PlantFuel Life vs. Campbell Soup | PlantFuel Life vs. Hormel Foods | PlantFuel Life vs. Flowers Foods |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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