Correlation Between Apple and CONAGRA FOODS
Can any of the company-specific risk be diversified away by investing in both Apple and CONAGRA 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 Apple and CONAGRA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and CONAGRA FOODS, you can compare the effects of market volatilities on Apple and CONAGRA 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 Apple with a short position of CONAGRA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and CONAGRA FOODS.
Diversification Opportunities for Apple and CONAGRA FOODS
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and CONAGRA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and CONAGRA FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONAGRA FOODS and Apple 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 Apple Inc are associated (or correlated) with CONAGRA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONAGRA FOODS has no effect on the direction of Apple i.e., Apple and CONAGRA FOODS go up and down completely randomly.
Pair Corralation between Apple and CONAGRA FOODS
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.1 times more return on investment than CONAGRA FOODS. However, Apple is 1.1 times more volatile than CONAGRA FOODS. It trades about 0.13 of its potential returns per unit of risk. CONAGRA FOODS is currently generating about -0.01 per unit of risk. If you would invest 17,397 in Apple Inc on August 25, 2024 and sell it today you would earn a total of 4,648 from holding Apple Inc or generate 26.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. CONAGRA FOODS
Performance |
| Timeline |
| Apple Inc |
| CONAGRA FOODS |
Apple and CONAGRA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and CONAGRA FOODS
The main advantage of trading using opposite Apple and CONAGRA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, CONAGRA 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 CONAGRA FOODS will offset losses from the drop in CONAGRA FOODS's long position.| Apple vs. AWILCO DRILLING PLC | Apple vs. NIPPON STEEL SPADR | Apple vs. GEELY AUTOMOBILE | Apple vs. LEGACY IRON ORE |
| CONAGRA FOODS vs. Apple Inc | CONAGRA FOODS vs. Apple Inc | CONAGRA FOODS vs. Apple Inc | CONAGRA FOODS vs. Apple Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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