Correlation Between Lamb Weston and BioAdaptives
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and BioAdaptives 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 BioAdaptives 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 BioAdaptives, you can compare the effects of market volatilities on Lamb Weston and BioAdaptives 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 BioAdaptives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and BioAdaptives.
Diversification Opportunities for Lamb Weston and BioAdaptives
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lamb and BioAdaptives is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and BioAdaptives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAdaptives 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 BioAdaptives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAdaptives has no effect on the direction of Lamb Weston i.e., Lamb Weston and BioAdaptives go up and down completely randomly.
Pair Corralation between Lamb Weston and BioAdaptives
Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to under-perform the BioAdaptives. But the stock apears to be less risky and, when comparing its historical volatility, Lamb Weston Holdings is 24.46 times less risky than BioAdaptives. The stock trades about -0.03 of its potential returns per unit of risk. The BioAdaptives is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.13 in BioAdaptives on August 28, 2024 and sell it today you would earn a total of 9.87 from holding BioAdaptives or generate 7592.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
Lamb Weston Holdings vs. BioAdaptives
Performance |
| Timeline |
| Lamb Weston Holdings |
| BioAdaptives |
Lamb Weston and BioAdaptives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and BioAdaptives
The main advantage of trading using opposite Lamb Weston and BioAdaptives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, BioAdaptives 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 BioAdaptives will offset losses from the drop in BioAdaptives' long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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