Correlation Between ConAgra Foods and Mamas Creations
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Mamas Creations 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 Mamas Creations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and Mamas Creations, you can compare the effects of market volatilities on ConAgra Foods and Mamas Creations 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 Mamas Creations. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Mamas Creations.
Diversification Opportunities for ConAgra Foods and Mamas Creations
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ConAgra and Mamas is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Mamas Creations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mamas Creations 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 Mamas Creations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mamas Creations has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Mamas Creations go up and down completely randomly.
Pair Corralation between ConAgra Foods and Mamas Creations
Considering the 90-day investment horizon ConAgra Foods is expected to under-perform the Mamas Creations. But the stock apears to be less risky and, when comparing its historical volatility, ConAgra Foods is 3.17 times less risky than Mamas Creations. The stock trades about -0.28 of its potential returns per unit of risk. The Mamas Creations is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 771.00 in Mamas Creations on August 27, 2024 and sell it today you would earn a total of 145.00 from holding Mamas Creations or generate 18.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConAgra Foods vs. Mamas Creations
Performance |
| Timeline |
| ConAgra Foods |
| Mamas Creations |
ConAgra Foods and Mamas Creations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and Mamas Creations
The main advantage of trading using opposite ConAgra Foods and Mamas Creations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Mamas Creations 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 Mamas Creations will offset losses from the drop in Mamas Creations' long position.| ConAgra Foods vs. Bellring Brands LLC | ConAgra Foods vs. Ingredion Incorporated | ConAgra Foods vs. Nomad Foods | ConAgra Foods vs. Simply Good 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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