Correlation Between Evergy, and Lamb Weston

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

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

Diversification Opportunities for Evergy, and Lamb Weston

0.48

Correlation Coefficient

Evergy,  Lamb Weston

Very weak diversification

The 3 months correlation between Evergy, and Lamb is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Evergy, 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 Evergy, 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 Evergy, 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 Evergy, i.e., Evergy, and Lamb Weston go up and down completely randomly.

Pair Corralation between Evergy, and Lamb Weston

Given the investment horizon of 90 days Evergy, is expected to generate 2.61 times less return on investment than Lamb Weston. But when comparing it to its historical volatility, Evergy, is 2.23 times less risky than Lamb Weston. It trades about 0.17 of its potential returns per unit of risk. Lamb Weston Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  6,143  in Lamb Weston Holdings on September 2, 2024 and sell it today you would earn a total of  1,581  from holding Lamb Weston Holdings or generate 25.74% return on investment over 90 days.

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

Evergy,  vs.  Lamb Weston Holdings

Evergy,

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evergy, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Evergy, may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lamb Weston Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lamb Weston Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Lamb Weston showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evergy, and Lamb Weston

The main advantage of trading using opposite Evergy, and Lamb Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergy, 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 Evergy, 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.