Correlation Between Brasilagro Adr and Lamb Weston

Can any of the company-specific risk be diversified away by investing in both Brasilagro Adr 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 Brasilagro Adr and Lamb Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brasilagro Adr and Lamb Weston Holdings, you can compare the effects of market volatilities on Brasilagro Adr 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 Brasilagro Adr with a short position of Lamb Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brasilagro Adr and Lamb Weston.

Diversification Opportunities for Brasilagro Adr and Lamb Weston

-0.13

Correlation Coefficient

Brasilagro Adr  Lamb Weston

Good diversification

The 3 months correlation between Brasilagro and Lamb is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Brasilagro Adr 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 Brasilagro Adr 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 Brasilagro Adr 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 Brasilagro Adr i.e., Brasilagro Adr and Lamb Weston go up and down completely randomly.

Pair Corralation between Brasilagro Adr and Lamb Weston

Considering the 90-day investment horizon Brasilagro Adr is expected to generate 0.69 times more return on investment than Lamb Weston. However, Brasilagro Adr is 1.45 times less risky than Lamb Weston. It trades about 0.12 of its potential returns per unit of risk. Lamb Weston Holdings is currently generating about -0.13 per unit of risk. If you would invest  355.00  in Brasilagro Adr on December 28, 2024 and sell it today you would earn a total of  39.00  from holding Brasilagro Adr or generate 10.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Brasilagro Adr  vs.  Lamb Weston Holdings

Brasilagro Adr

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brasilagro Adr are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Brasilagro Adr may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Lamb Weston Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lamb Weston Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Brasilagro Adr and Lamb Weston

The main advantage of trading using opposite Brasilagro Adr and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brasilagro Adr 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 Brasilagro Adr 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.