Correlation Between McCormick Company and Fraser
Can any of the company-specific risk be diversified away by investing in both McCormick Company and Fraser 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 McCormick Company and Fraser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McCormick Company Incorporated and Fraser and Neave, you can compare the effects of market volatilities on McCormick Company and Fraser 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 McCormick Company with a short position of Fraser. Check out your portfolio center. Please also check ongoing floating volatility patterns of McCormick Company and Fraser.
Diversification Opportunities for McCormick Company and Fraser
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McCormick and Fraser is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding McCormick Company Incorporated and Fraser and Neave in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fraser and Neave and McCormick Company 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 McCormick Company Incorporated are associated (or correlated) with Fraser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fraser and Neave has no effect on the direction of McCormick Company i.e., McCormick Company and Fraser go up and down completely randomly.
Pair Corralation between McCormick Company and Fraser
If you would invest 112.00 in Fraser and Neave on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Fraser and Neave or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McCormick Company Incorporated vs. Fraser and Neave
Performance |
| Timeline |
| McCormick Company |
| Fraser and Neave |
McCormick Company and Fraser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McCormick Company and Fraser
The main advantage of trading using opposite McCormick Company and Fraser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McCormick Company position performs unexpectedly, Fraser 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 Fraser will offset losses from the drop in Fraser's long position.| McCormick Company vs. Central Garden Pet | McCormick Company vs. Seneca Foods Corp | McCormick Company vs. Natures Sunshine Products | McCormick Company vs. Seneca Foods Corp |
| Fraser vs. Kellanova | Fraser vs. Lancaster Colony | Fraser vs. The A2 Milk | Fraser vs. Altavoz Entertainment |
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 CEOs Directory module to screen CEOs from public companies around the world.
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