Correlation Between CONAGRA FOODS and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both CONAGRA FOODS and PennantPark Investment 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 PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONAGRA FOODS and PennantPark Investment, you can compare the effects of market volatilities on CONAGRA FOODS and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONAGRA FOODS and PennantPark Investment.
Diversification Opportunities for CONAGRA FOODS and PennantPark Investment
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CONAGRA and PennantPark is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of CONAGRA FOODS i.e., CONAGRA FOODS and PennantPark Investment go up and down completely randomly.
Pair Corralation between CONAGRA FOODS and PennantPark Investment
Assuming the 90 days trading horizon CONAGRA FOODS is expected to under-perform the PennantPark Investment. But the stock apears to be less risky and, when comparing its historical volatility, CONAGRA FOODS is 1.48 times less risky than PennantPark Investment. The stock trades about -0.03 of its potential returns per unit of risk. The PennantPark Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 409.00 in PennantPark Investment on August 30, 2024 and sell it today you would earn a total of 249.00 from holding PennantPark Investment or generate 60.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
CONAGRA FOODS vs. PennantPark Investment
Performance |
| Timeline |
| CONAGRA FOODS |
| PennantPark Investment |
CONAGRA FOODS and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONAGRA FOODS and PennantPark Investment
The main advantage of trading using opposite CONAGRA FOODS and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONAGRA FOODS position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| CONAGRA FOODS vs. Apple Inc | CONAGRA FOODS vs. Apple Inc | CONAGRA FOODS vs. Superior Plus Corp | CONAGRA FOODS vs. SIVERS SEMICONDUCTORS AB |
| PennantPark Investment vs. THAI BEVERAGE | PennantPark Investment vs. LG Display Co | PennantPark Investment vs. USWE SPORTS AB | PennantPark Investment vs. NISSIN FOODS HLDGS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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