Correlation Between ConAgra Foods and Vital Farms
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Vital Farms 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 Vital Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and Vital Farms, you can compare the effects of market volatilities on ConAgra Foods and Vital Farms 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 Vital Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Vital Farms.
Diversification Opportunities for ConAgra Foods and Vital Farms
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ConAgra and Vital is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Vital Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vital Farms 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 Vital Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vital Farms has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Vital Farms go up and down completely randomly.
Pair Corralation between ConAgra Foods and Vital Farms
Considering the 90-day investment horizon ConAgra Foods is expected to under-perform the Vital Farms. But the stock apears to be less risky and, when comparing its historical volatility, ConAgra Foods is 3.65 times less risky than Vital Farms. The stock trades about -0.14 of its potential returns per unit of risk. The Vital Farms is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,456 in Vital Farms on September 5, 2024 and sell it today you would lose (42.00) from holding Vital Farms or give up 1.22% 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. Vital Farms
Performance |
| Timeline |
| ConAgra Foods |
| Vital Farms |
ConAgra Foods and Vital Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and Vital Farms
The main advantage of trading using opposite ConAgra Foods and Vital Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Vital Farms 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 Vital Farms will offset losses from the drop in Vital Farms' long position.| ConAgra Foods vs. Hormel Foods | ConAgra Foods vs. McCormick Company Incorporated | ConAgra Foods vs. Lamb Weston Holdings | ConAgra Foods vs. JM Smucker |
| Vital Farms vs. Fresh Del Monte | Vital Farms vs. Alico Inc | Vital Farms vs. SW Seed Company | Vital Farms vs. Adecoagro SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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