Correlation Between CONAGRA FOODS and SEIKO EPSON
Can any of the company-specific risk be diversified away by investing in both CONAGRA FOODS and SEIKO EPSON 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 SEIKO EPSON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONAGRA FOODS and SEIKO EPSON PADR, you can compare the effects of market volatilities on CONAGRA FOODS and SEIKO EPSON 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 SEIKO EPSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONAGRA FOODS and SEIKO EPSON.
Diversification Opportunities for CONAGRA FOODS and SEIKO EPSON
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between CONAGRA and SEIKO is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and SEIKO EPSON PADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEIKO EPSON PADR 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 SEIKO EPSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEIKO EPSON PADR has no effect on the direction of CONAGRA FOODS i.e., CONAGRA FOODS and SEIKO EPSON go up and down completely randomly.
Pair Corralation between CONAGRA FOODS and SEIKO EPSON
Assuming the 90 days trading horizon CONAGRA FOODS is expected to under-perform the SEIKO EPSON. But the stock apears to be less risky and, when comparing its historical volatility, CONAGRA FOODS is 2.32 times less risky than SEIKO EPSON. The stock trades about -0.07 of its potential returns per unit of risk. The SEIKO EPSON PADR is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 820.00 in SEIKO EPSON PADR on September 1, 2024 and sell it today you would lose (10.00) from holding SEIKO EPSON PADR or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONAGRA FOODS vs. SEIKO EPSON PADR
Performance |
| Timeline |
| CONAGRA FOODS |
| SEIKO EPSON PADR |
CONAGRA FOODS and SEIKO EPSON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONAGRA FOODS and SEIKO EPSON
The main advantage of trading using opposite CONAGRA FOODS and SEIKO EPSON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONAGRA FOODS position performs unexpectedly, SEIKO EPSON 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 SEIKO EPSON will offset losses from the drop in SEIKO EPSON'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 |
| SEIKO EPSON vs. Superior Plus Corp | SEIKO EPSON vs. NMI Holdings | SEIKO EPSON vs. Origin Agritech | SEIKO EPSON vs. SIVERS SEMICONDUCTORS AB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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