Correlation Between Lamb Weston and Adecoagro
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Adecoagro 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 Lamb Weston and Adecoagro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamb Weston Holdings and Adecoagro SA, you can compare the effects of market volatilities on Lamb Weston and Adecoagro 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 Lamb Weston with a short position of Adecoagro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Adecoagro.
Diversification Opportunities for Lamb Weston and Adecoagro
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lamb and Adecoagro is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Adecoagro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecoagro SA and Lamb Weston 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 Lamb Weston Holdings are associated (or correlated) with Adecoagro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecoagro SA has no effect on the direction of Lamb Weston i.e., Lamb Weston and Adecoagro go up and down completely randomly.
Pair Corralation between Lamb Weston and Adecoagro
Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to under-perform the Adecoagro. In addition to that, Lamb Weston is 1.93 times more volatile than Adecoagro SA. It trades about -0.11 of its total potential returns per unit of risk. Adecoagro SA is currently generating about -0.14 per unit of volatility. If you would invest 1,120 in Adecoagro SA on October 20, 2024 and sell it today you would lose (154.00) from holding Adecoagro SA or give up 13.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Adecoagro SA
Performance |
| Timeline |
| Lamb Weston Holdings |
| Adecoagro SA |
Lamb Weston and Adecoagro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Adecoagro
The main advantage of trading using opposite Lamb Weston and Adecoagro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Adecoagro 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 Adecoagro will offset losses from the drop in Adecoagro's long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
| Adecoagro vs. Limoneira Co | Adecoagro vs. Dole PLC | Adecoagro vs. Alico Inc | Adecoagro vs. Cal Maine 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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