Correlation Between ConAgra Foods and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Bridgford 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 ConAgra Foods and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and Bridgford Foods, you can compare the effects of market volatilities on ConAgra Foods and Bridgford 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 ConAgra Foods with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Bridgford Foods.
Diversification Opportunities for ConAgra Foods and Bridgford Foods
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ConAgra and Bridgford is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods 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 Bridgford Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgford Foods has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Bridgford Foods go up and down completely randomly.
Pair Corralation between ConAgra Foods and Bridgford Foods
Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.52 times more return on investment than Bridgford Foods. However, ConAgra Foods is 1.92 times less risky than Bridgford Foods. It trades about -0.02 of its potential returns per unit of risk. Bridgford Foods is currently generating about -0.01 per unit of risk. If you would invest 3,212 in ConAgra Foods on August 31, 2024 and sell it today you would lose (457.00) from holding ConAgra Foods or give up 14.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.93% |
| Values | Daily Returns |
ConAgra Foods vs. Bridgford Foods
Performance |
| Timeline |
| ConAgra Foods |
| Bridgford Foods |
ConAgra Foods and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and Bridgford Foods
The main advantage of trading using opposite ConAgra Foods and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Bridgford 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 Bridgford Foods will offset losses from the drop in Bridgford Foods' 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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