Correlation Between Lamb Weston and Maison Solutions

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Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Maison Solutions 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 Maison Solutions 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 Maison Solutions, you can compare the effects of market volatilities on Lamb Weston and Maison Solutions 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 Maison Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Maison Solutions.

Diversification Opportunities for Lamb Weston and Maison Solutions

LambMaisonDiversified AwayLambMaisonDiversified Away100%
-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Lamb and Maison is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Maison Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maison Solutions 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 Maison Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maison Solutions has no effect on the direction of Lamb Weston i.e., Lamb Weston and Maison Solutions go up and down completely randomly.

Pair Corralation between Lamb Weston and Maison Solutions

Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to under-perform the Maison Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Lamb Weston Holdings is 2.14 times less risky than Maison Solutions. The stock trades about -0.43 of its potential returns per unit of risk. The Maison Solutions is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  115.00  in Maison Solutions on November 27, 2024 and sell it today you would earn a total of  8.00  from holding Maison Solutions or generate 6.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Lamb Weston Holdings  vs.  Maison Solutions

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20020406080
JavaScript chart by amCharts 3.21.15LW MSS
       Timeline  
Lamb Weston Holdings 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Lamb Weston Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb556065707580
Maison Solutions 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Maison Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Maison Solutions unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.21.41.61.82

Lamb Weston and Maison Solutions Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.62-4.21-2.8-1.390.01.22.413.634.84 0.0100.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15LW MSS
       Returns  

Pair Trading with Lamb Weston and Maison Solutions

The main advantage of trading using opposite Lamb Weston and Maison Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Maison Solutions 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 Maison Solutions will offset losses from the drop in Maison Solutions' long position.
The idea behind Lamb Weston Holdings and Maison Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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