Correlation Between ConAgra Foods and Nuzee
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Nuzee 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 Nuzee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and Nuzee Inc, you can compare the effects of market volatilities on ConAgra Foods and Nuzee 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 Nuzee. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Nuzee.
Diversification Opportunities for ConAgra Foods and Nuzee
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ConAgra and Nuzee is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Nuzee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuzee Inc 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 Nuzee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuzee Inc has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Nuzee go up and down completely randomly.
Pair Corralation between ConAgra Foods and Nuzee
Considering the 90-day investment horizon ConAgra Foods is expected to under-perform the Nuzee. But the stock apears to be less risky and, when comparing its historical volatility, ConAgra Foods is 51.68 times less risky than Nuzee. The stock trades about -0.12 of its potential returns per unit of risk. The Nuzee Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 124.00 in Nuzee Inc on August 28, 2024 and sell it today you would lose (25.00) from holding Nuzee Inc or give up 20.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 74.6% |
| Values | Daily Returns |
ConAgra Foods vs. Nuzee Inc
Performance |
| Timeline |
| ConAgra Foods |
| Nuzee Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
ConAgra Foods and Nuzee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and Nuzee
The main advantage of trading using opposite ConAgra Foods and Nuzee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Nuzee 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 Nuzee will offset losses from the drop in Nuzee's long position.| ConAgra Foods vs. Bellring Brands LLC | ConAgra Foods vs. Ingredion Incorporated | ConAgra Foods vs. Nomad Foods | ConAgra Foods vs. Simply Good Foods |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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