Correlation Between ConAgra Foods and Altria
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Altria 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 Altria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and Altria Group, you can compare the effects of market volatilities on ConAgra Foods and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Altria.
Diversification Opportunities for ConAgra Foods and Altria
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ConAgra and Altria is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Altria go up and down completely randomly.
Pair Corralation between ConAgra Foods and Altria
Considering the 90-day investment horizon ConAgra Foods is expected to under-perform the Altria. In addition to that, ConAgra Foods is 1.22 times more volatile than Altria Group. It trades about -0.03 of its total potential returns per unit of risk. Altria Group is currently generating about 0.08 per unit of volatility. If you would invest 3,825 in Altria Group on December 6, 2024 and sell it today you would earn a total of 1,876 from holding Altria Group or generate 49.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConAgra Foods vs. Altria Group
Performance |
| Timeline |
| ConAgra Foods |
| Altria Group |
ConAgra Foods and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and Altria
The main advantage of trading using opposite ConAgra Foods and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.| ConAgra Foods vs. Kellanova | ConAgra Foods vs. General Mills | ConAgra Foods vs. JM Smucker | ConAgra Foods vs. Hormel Foods |
| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
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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