Correlation Between Lamb Weston and Ingredion Incorporated
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated, you can compare the effects of market volatilities on Lamb Weston and Ingredion Incorporated 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 Ingredion Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Ingredion Incorporated.
Diversification Opportunities for Lamb Weston and Ingredion Incorporated
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lamb and Ingredion is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Ingredion Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingredion Incorporated 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 Ingredion Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingredion Incorporated has no effect on the direction of Lamb Weston i.e., Lamb Weston and Ingredion Incorporated go up and down completely randomly.
Pair Corralation between Lamb Weston and Ingredion Incorporated
Allowing for the 90-day total investment horizon Lamb Weston is expected to generate 11.69 times less return on investment than Ingredion Incorporated. In addition to that, Lamb Weston is 1.66 times more volatile than Ingredion Incorporated. It trades about 0.0 of its total potential returns per unit of risk. Ingredion Incorporated is currently generating about 0.07 per unit of volatility. If you would invest 9,375 in Ingredion Incorporated on August 28, 2024 and sell it today you would earn a total of 5,453 from holding Ingredion Incorporated or generate 58.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Ingredion Incorporated
Performance |
| Timeline |
| Lamb Weston Holdings |
| Ingredion Incorporated |
Lamb Weston and Ingredion Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Ingredion Incorporated
The main advantage of trading using opposite Lamb Weston and Ingredion Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Ingredion Incorporated 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 Ingredion Incorporated will offset losses from the drop in Ingredion Incorporated's long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |