Correlation Between McCormick Company and ETF Series
Can any of the company-specific risk be diversified away by investing in both McCormick Company and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on McCormick Company and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of McCormick Company and ETF Series.
Diversification Opportunities for McCormick Company and ETF Series
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between McCormick and ETF is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding McCormick Company Incorporated and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of McCormick Company i.e., McCormick Company and ETF Series go up and down completely randomly.
Pair Corralation between McCormick Company and ETF Series
Considering the 90-day investment horizon McCormick Company Incorporated is expected to generate 7.21 times more return on investment than ETF Series. However, McCormick Company is 7.21 times more volatile than ETF Series Solutions. It trades about 0.02 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.09 per unit of risk. If you would invest 7,748 in McCormick Company Incorporated on August 30, 2024 and sell it today you would earn a total of 31.00 from holding McCormick Company Incorporated or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
McCormick Company Incorporated vs. ETF Series Solutions
Performance |
| Timeline |
| McCormick Company |
| ETF Series Solutions |
McCormick Company and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McCormick Company and ETF Series
The main advantage of trading using opposite McCormick Company and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McCormick Company position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| McCormick Company vs. ConAgra Foods | McCormick Company vs. Campbell Soup | McCormick Company vs. Kellanova | McCormick Company vs. General Mills |
| ETF Series vs. Valued Advisers Trust | ETF Series vs. Columbia Diversified Fixed | ETF Series vs. Principal Exchange Traded Funds | ETF Series vs. Doubleline Etf Trust |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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