Correlation Between Lamb Weston and Sendas Distribuidora
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Sendas Distribuidora 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 Sendas Distribuidora 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 Sendas Distribuidora SA, you can compare the effects of market volatilities on Lamb Weston and Sendas Distribuidora 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 Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Sendas Distribuidora.
Diversification Opportunities for Lamb Weston and Sendas Distribuidora
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lamb and Sendas is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora 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 Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Lamb Weston i.e., Lamb Weston and Sendas Distribuidora go up and down completely randomly.
Pair Corralation between Lamb Weston and Sendas Distribuidora
Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to generate 2.19 times more return on investment than Sendas Distribuidora. However, Lamb Weston is 2.19 times more volatile than Sendas Distribuidora SA. It trades about -0.04 of its potential returns per unit of risk. Sendas Distribuidora SA is currently generating about -0.58 per unit of risk. If you would invest 6,052 in Lamb Weston Holdings on November 9, 2024 and sell it today you would lose (106.00) from holding Lamb Weston Holdings or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 15.0% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Sendas Distribuidora SA
Performance |
| Timeline |
| Lamb Weston Holdings |
| Sendas Distribuidora |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Lamb Weston and Sendas Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Sendas Distribuidora
The main advantage of trading using opposite Lamb Weston and Sendas Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Sendas Distribuidora 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 Sendas Distribuidora will offset losses from the drop in Sendas Distribuidora's long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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