Correlation Between ConAgra Foods and A2 Milk
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and A2 Milk 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 ConAgra Foods and A2 Milk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and The A2 Milk, you can compare the effects of market volatilities on ConAgra Foods and A2 Milk 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 ConAgra Foods with a short position of A2 Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and A2 Milk.
Diversification Opportunities for ConAgra Foods and A2 Milk
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between ConAgra and ACOPY is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and The A2 Milk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A2 Milk and ConAgra Foods 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 ConAgra Foods are associated (or correlated) with A2 Milk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A2 Milk has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and A2 Milk go up and down completely randomly.
Pair Corralation between ConAgra Foods and A2 Milk
Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.41 times more return on investment than A2 Milk. However, ConAgra Foods is 2.44 times less risky than A2 Milk. It trades about -0.02 of its potential returns per unit of risk. The A2 Milk is currently generating about -0.05 per unit of risk. If you would invest 2,904 in ConAgra Foods on August 30, 2024 and sell it today you would lose (155.00) from holding ConAgra Foods or give up 5.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConAgra Foods vs. The A2 Milk
Performance |
| Timeline |
| ConAgra Foods |
| A2 Milk |
ConAgra Foods and A2 Milk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and A2 Milk
The main advantage of trading using opposite ConAgra Foods and A2 Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, A2 Milk 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 A2 Milk will offset losses from the drop in A2 Milk's long position.| ConAgra Foods vs. Kellanova | ConAgra Foods vs. General Mills | ConAgra Foods vs. JM Smucker | ConAgra Foods vs. Hormel Foods |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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