Correlation Between CONAGRA FOODS and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both CONAGRA FOODS and DICKS Sporting 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 DICKS Sporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONAGRA FOODS and DICKS Sporting Goods, you can compare the effects of market volatilities on CONAGRA FOODS and DICKS Sporting 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 DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONAGRA FOODS and DICKS Sporting.
Diversification Opportunities for CONAGRA FOODS and DICKS Sporting
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CONAGRA and DICKS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods 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 DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of CONAGRA FOODS i.e., CONAGRA FOODS and DICKS Sporting go up and down completely randomly.
Pair Corralation between CONAGRA FOODS and DICKS Sporting
Assuming the 90 days trading horizon CONAGRA FOODS is expected to under-perform the DICKS Sporting. But the stock apears to be less risky and, when comparing its historical volatility, CONAGRA FOODS is 2.11 times less risky than DICKS Sporting. The stock trades about -0.02 of its potential returns per unit of risk. The DICKS Sporting Goods is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,929 in DICKS Sporting Goods on August 31, 2024 and sell it today you would earn a total of 8,116 from holding DICKS Sporting Goods or generate 68.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
CONAGRA FOODS vs. DICKS Sporting Goods
Performance |
| Timeline |
| CONAGRA FOODS |
| DICKS Sporting Goods |
CONAGRA FOODS and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONAGRA FOODS and DICKS Sporting
The main advantage of trading using opposite CONAGRA FOODS and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONAGRA FOODS position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's 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 |
| DICKS Sporting vs. MercadoLibre | DICKS Sporting vs. AutoZone | DICKS Sporting vs. Superior Plus Corp | DICKS Sporting vs. NMI Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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