Correlation Between Meiji Holdings and Lancaster Colony
Can any of the company-specific risk be diversified away by investing in both Meiji Holdings and Lancaster Colony 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 Meiji Holdings and Lancaster Colony into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meiji Holdings Co and Lancaster Colony, you can compare the effects of market volatilities on Meiji Holdings and Lancaster Colony 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 Meiji Holdings with a short position of Lancaster Colony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiji Holdings and Lancaster Colony.
Diversification Opportunities for Meiji Holdings and Lancaster Colony
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meiji and Lancaster is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Meiji Holdings Co and Lancaster Colony in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancaster Colony and Meiji Holdings 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 Meiji Holdings Co are associated (or correlated) with Lancaster Colony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancaster Colony has no effect on the direction of Meiji Holdings i.e., Meiji Holdings and Lancaster Colony go up and down completely randomly.
Pair Corralation between Meiji Holdings and Lancaster Colony
Assuming the 90 days horizon Meiji Holdings Co is expected to under-perform the Lancaster Colony. In addition to that, Meiji Holdings is 2.26 times more volatile than Lancaster Colony. It trades about -0.11 of its total potential returns per unit of risk. Lancaster Colony is currently generating about 0.0 per unit of volatility. If you would invest 18,732 in Lancaster Colony on September 5, 2024 and sell it today you would lose (69.00) from holding Lancaster Colony or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiji Holdings Co vs. Lancaster Colony
Performance |
| Timeline |
| Meiji Holdings |
| Lancaster Colony |
Meiji Holdings and Lancaster Colony Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiji Holdings and Lancaster Colony
The main advantage of trading using opposite Meiji Holdings and Lancaster Colony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiji Holdings position performs unexpectedly, Lancaster Colony 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 Lancaster Colony will offset losses from the drop in Lancaster Colony's long position.| Meiji Holdings vs. Kellanova | Meiji Holdings vs. Lancaster Colony | Meiji Holdings vs. The A2 Milk | Meiji Holdings vs. Artisan Consumer Goods |
| Lancaster Colony vs. Treehouse Foods | Lancaster Colony vs. John B Sanfilippo | Lancaster Colony vs. Seneca Foods Corp | Lancaster Colony 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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