Correlation Between Lamb Weston and Calbee
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Calbee 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 Calbee 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 Calbee Inc, you can compare the effects of market volatilities on Lamb Weston and Calbee 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 Calbee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Calbee.
Diversification Opportunities for Lamb Weston and Calbee
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lamb and Calbee is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee Inc 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 Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of Lamb Weston i.e., Lamb Weston and Calbee go up and down completely randomly.
Pair Corralation between Lamb Weston and Calbee
Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to under-perform the Calbee. But the stock apears to be less risky and, when comparing its historical volatility, Lamb Weston Holdings is 1.22 times less risky than Calbee. The stock trades about -0.03 of its potential returns per unit of risk. The Calbee Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 546.00 in Calbee Inc on September 1, 2024 and sell it today you would lose (45.00) from holding Calbee Inc or give up 8.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Calbee Inc
Performance |
| Timeline |
| Lamb Weston Holdings |
| Calbee Inc |
Lamb Weston and Calbee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Calbee
The main advantage of trading using opposite Lamb Weston and Calbee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Calbee 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 Calbee will offset losses from the drop in Calbee's long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
| Calbee vs. The A2 Milk | Calbee vs. Altavoz Entertainment | Calbee vs. Artisan Consumer Goods | Calbee vs. General Mills |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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