Correlation Between McCormick Company and Dean Foods
Can any of the company-specific risk be diversified away by investing in both McCormick Company and Dean Foods 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 Dean Foods 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 Dean Foods, you can compare the effects of market volatilities on McCormick Company and Dean Foods 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 Dean Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of McCormick Company and Dean Foods.
Diversification Opportunities for McCormick Company and Dean Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McCormick and Dean is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McCormick Company Incorporated and Dean Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dean Foods 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 Dean Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dean Foods has no effect on the direction of McCormick Company i.e., McCormick Company and Dean Foods go up and down completely randomly.
Pair Corralation between McCormick Company and Dean Foods
If you would invest (100.00) in Dean Foods on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Dean Foods or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
McCormick Company Incorporated vs. Dean Foods
Performance |
| Timeline |
| McCormick rporated |
| Dean Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McCormick Company and Dean Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McCormick Company and Dean Foods
The main advantage of trading using opposite McCormick Company and Dean Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McCormick Company position performs unexpectedly, Dean Foods 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 Dean Foods will offset losses from the drop in Dean Foods' long position.| McCormick Company vs. ConAgra Foods | McCormick Company vs. Campbell Soup | McCormick Company vs. Kellanova | McCormick Company vs. General Mills |
| Dean Foods vs. Employers Holdings | Dean Foods vs. Old Republic International | Dean Foods vs. Qualys Inc | Dean Foods vs. NI 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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