Correlation Between Shineco and Lamb Weston
Can any of the company-specific risk be diversified away by investing in both Shineco and Lamb Weston 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 Shineco and Lamb Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shineco and Lamb Weston Holdings, you can compare the effects of market volatilities on Shineco and Lamb Weston 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 Shineco with a short position of Lamb Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shineco and Lamb Weston.
Diversification Opportunities for Shineco and Lamb Weston
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shineco and Lamb is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shineco and Lamb Weston Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamb Weston Holdings and Shineco 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 Shineco are associated (or correlated) with Lamb Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamb Weston Holdings has no effect on the direction of Shineco i.e., Shineco and Lamb Weston go up and down completely randomly.
Pair Corralation between Shineco and Lamb Weston
Given the investment horizon of 90 days Shineco is expected to generate 20.26 times more return on investment than Lamb Weston. However, Shineco is 20.26 times more volatile than Lamb Weston Holdings. It trades about 0.03 of its potential returns per unit of risk. Lamb Weston Holdings is currently generating about 0.01 per unit of risk. If you would invest 3,120 in Shineco on September 2, 2024 and sell it today you would lose (2,873) from holding Shineco or give up 92.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shineco vs. Lamb Weston Holdings
Performance |
| Timeline |
| Shineco |
| Lamb Weston Holdings |
Shineco and Lamb Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shineco and Lamb Weston
The main advantage of trading using opposite Shineco and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shineco position performs unexpectedly, Lamb Weston 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 Lamb Weston will offset losses from the drop in Lamb Weston's long position.The idea behind Shineco and Lamb Weston Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lamb Weston vs. Allegion PLC | Lamb Weston vs. Evergy, | Lamb Weston vs. Fortive Corp | Lamb Weston vs. IQVIA Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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