Correlation Between Lamb Weston and Aryzta AG
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Aryzta AG 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 Aryzta AG 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 Aryzta AG PK, you can compare the effects of market volatilities on Lamb Weston and Aryzta AG 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 Aryzta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Aryzta AG.
Diversification Opportunities for Lamb Weston and Aryzta AG
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lamb and Aryzta is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Aryzta AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG PK 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 Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG PK has no effect on the direction of Lamb Weston i.e., Lamb Weston and Aryzta AG go up and down completely randomly.
Pair Corralation between Lamb Weston and Aryzta AG
Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to generate 0.6 times more return on investment than Aryzta AG. However, Lamb Weston Holdings is 1.65 times less risky than Aryzta AG. It trades about 0.08 of its potential returns per unit of risk. Aryzta AG PK is currently generating about -0.12 per unit of risk. If you would invest 7,746 in Lamb Weston Holdings on September 4, 2024 and sell it today you would earn a total of 195.00 from holding Lamb Weston Holdings or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Aryzta AG PK
Performance |
| Timeline |
| Lamb Weston Holdings |
| Aryzta AG PK |
Lamb Weston and Aryzta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Aryzta AG
The main advantage of trading using opposite Lamb Weston and Aryzta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Aryzta AG 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 Aryzta AG will offset losses from the drop in Aryzta AG's long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
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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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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