Correlation Between Lamb Weston and Steakholder Foods
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Steakholder Foods 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 Steakholder Foods 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 Steakholder Foods, you can compare the effects of market volatilities on Lamb Weston and Steakholder Foods 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 Steakholder Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Steakholder Foods.
Diversification Opportunities for Lamb Weston and Steakholder Foods
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lamb and Steakholder is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Steakholder Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steakholder Foods 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 Steakholder Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steakholder Foods has no effect on the direction of Lamb Weston i.e., Lamb Weston and Steakholder Foods go up and down completely randomly.
Pair Corralation between Lamb Weston and Steakholder Foods
Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to generate 0.43 times more return on investment than Steakholder Foods. However, Lamb Weston Holdings is 2.34 times less risky than Steakholder Foods. It trades about -0.04 of its potential returns per unit of risk. Steakholder Foods is currently generating about -0.25 per unit of risk. If you would invest 7,917 in Lamb Weston Holdings on September 6, 2024 and sell it today you would lose (148.00) from holding Lamb Weston Holdings or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Steakholder Foods
Performance |
| Timeline |
| Lamb Weston Holdings |
| Steakholder Foods |
Lamb Weston and Steakholder Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Steakholder Foods
The main advantage of trading using opposite Lamb Weston and Steakholder Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Steakholder Foods 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 Steakholder Foods will offset losses from the drop in Steakholder Foods' long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
| Steakholder Foods vs. Farmmi Inc | Steakholder Foods vs. Herbalife Nutrition | Steakholder Foods vs. Beyond Meat | Steakholder Foods vs. Bit Origin |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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