Correlation Between Freshpet and Lamb Weston
Can any of the company-specific risk be diversified away by investing in both Freshpet 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 Freshpet and Lamb Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freshpet and Lamb Weston Holdings, you can compare the effects of market volatilities on Freshpet 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 Freshpet with a short position of Lamb Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freshpet and Lamb Weston.
Diversification Opportunities for Freshpet and Lamb Weston
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Freshpet and Lamb is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Freshpet 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 Freshpet 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 Freshpet 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 Freshpet i.e., Freshpet and Lamb Weston go up and down completely randomly.
Pair Corralation between Freshpet and Lamb Weston
Given the investment horizon of 90 days Freshpet is expected to generate 0.34 times more return on investment than Lamb Weston. However, Freshpet is 2.94 times less risky than Lamb Weston. It trades about -0.11 of its potential returns per unit of risk. Lamb Weston Holdings is currently generating about -0.16 per unit of risk. If you would invest 11,147 in Freshpet on February 3, 2024 and sell it today you would lose (439.00) from holding Freshpet or give up 3.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Freshpet vs. Lamb Weston Holdings
Performance |
Timeline |
Freshpet |
Lamb Weston Holdings |
Freshpet and Lamb Weston Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Freshpet and Lamb Weston
The main advantage of trading using opposite Freshpet and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freshpet 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.Freshpet vs. Green Globe International | Freshpet vs. Greenlane Holdings | Freshpet vs. 22nd Century Group | Freshpet vs. 1606 Corp |
Lamb Weston vs. Green Globe International | Lamb Weston vs. Greenlane Holdings | Lamb Weston vs. 22nd Century Group | Lamb Weston vs. 1606 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |