Correlation Between Lamb Weston and Utz Brands
Can any of the company-specific risk be diversified away by investing in both Lamb Weston and Utz Brands 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 Utz Brands 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 Utz Brands, you can compare the effects of market volatilities on Lamb Weston and Utz Brands 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 Utz Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Utz Brands.
Diversification Opportunities for Lamb Weston and Utz Brands
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lamb and Utz is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Utz Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utz Brands 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 Utz Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utz Brands has no effect on the direction of Lamb Weston i.e., Lamb Weston and Utz Brands go up and down completely randomly.
Pair Corralation between Lamb Weston and Utz Brands
Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to generate 0.91 times more return on investment than Utz Brands. However, Lamb Weston Holdings is 1.1 times less risky than Utz Brands. It trades about 0.2 of its potential returns per unit of risk. Utz Brands is currently generating about -0.01 per unit of risk. If you would invest 6,143 in Lamb Weston Holdings on August 31, 2024 and sell it today you would earn a total of 1,528 from holding Lamb Weston Holdings or generate 24.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Utz Brands
Performance |
| Timeline |
| Lamb Weston Holdings |
| Utz Brands |
Lamb Weston and Utz Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Utz Brands
The main advantage of trading using opposite Lamb Weston and Utz Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston position performs unexpectedly, Utz Brands 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 Utz Brands will offset losses from the drop in Utz Brands' long position.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
| Utz Brands vs. Post Holdings | Utz Brands vs. J J Snack | Utz Brands vs. The Hain Celestial | Utz Brands vs. Bellring Brands LLC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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