Correlation Between CONAGRA FOODS and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both CONAGRA FOODS and Canadian Utilities 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 Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONAGRA FOODS and Canadian Utilities Limited, you can compare the effects of market volatilities on CONAGRA FOODS and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONAGRA FOODS and Canadian Utilities.
Diversification Opportunities for CONAGRA FOODS and Canadian Utilities
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CONAGRA and Canadian is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of CONAGRA FOODS i.e., CONAGRA FOODS and Canadian Utilities go up and down completely randomly.
Pair Corralation between CONAGRA FOODS and Canadian Utilities
Assuming the 90 days trading horizon CONAGRA FOODS is expected to under-perform the Canadian Utilities. In addition to that, CONAGRA FOODS is 1.09 times more volatile than Canadian Utilities Limited. It trades about -0.02 of its total potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.02 per unit of volatility. If you would invest 2,202 in Canadian Utilities Limited on August 31, 2024 and sell it today you would earn a total of 197.00 from holding Canadian Utilities Limited or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
CONAGRA FOODS vs. Canadian Utilities Limited
Performance |
| Timeline |
| CONAGRA FOODS |
| Canadian Utilities |
CONAGRA FOODS and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONAGRA FOODS and Canadian Utilities
The main advantage of trading using opposite CONAGRA FOODS and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONAGRA FOODS position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| CONAGRA FOODS vs. SIVERS SEMICONDUCTORS AB | CONAGRA FOODS vs. Darden Restaurants | CONAGRA FOODS vs. Reliance Steel Aluminum | CONAGRA FOODS vs. Q2M Managementberatung AG |
| Canadian Utilities vs. LGI Homes | Canadian Utilities vs. Haier Smart Home | Canadian Utilities vs. JJ SNACK FOODS | Canadian Utilities vs. DFS Furniture PLC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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