Correlation Between Lamb Weston and Consumer Products
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Consumer Products 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 Consumer Products 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 Consumer Products Fund, you can compare the effects of market volatilities on Lamb Weston and Consumer Products 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 Consumer Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Consumer Products.
Diversification Opportunities for Lamb Weston and Consumer Products
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lamb and Consumer is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Consumer Products Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Products 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 Consumer Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Products has no effect on the direction of Lamb Weston i.e., Lamb Weston and Consumer Products go up and down completely randomly.
Pair Corralation between Lamb Weston and Consumer Products
Allowing for the 90-day total investment horizon Lamb Weston is expected to generate 44.32 times less return on investment than Consumer Products. In addition to that, Lamb Weston is 3.0 times more volatile than Consumer Products Fund. It trades about 0.0 of its total potential returns per unit of risk. Consumer Products Fund is currently generating about 0.22 per unit of volatility. If you would invest 5,343 in Consumer Products Fund on August 31, 2024 and sell it today you would earn a total of 146.00 from holding Consumer Products Fund or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Consumer Products Fund
Performance |
| Timeline |
| Lamb Weston Holdings |
| Consumer Products |
Lamb Weston and Consumer Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Consumer Products
The main advantage of trading using opposite Lamb Weston and Consumer Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Consumer Products 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 Consumer Products will offset losses from the drop in Consumer Products' long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
| Consumer Products vs. Health Care Fund | Consumer Products vs. Banking Fund Investor | Consumer Products vs. Retailing Fund Investor | Consumer Products vs. Financial Services Fund |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |