Correlation Between Carlsberg A/S and CONAGRA FOODS
Can any of the company-specific risk be diversified away by investing in both Carlsberg A/S and CONAGRA FOODS 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 Carlsberg A/S and CONAGRA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and CONAGRA FOODS, you can compare the effects of market volatilities on Carlsberg A/S and CONAGRA FOODS 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 Carlsberg A/S with a short position of CONAGRA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg A/S and CONAGRA FOODS.
Diversification Opportunities for Carlsberg A/S and CONAGRA FOODS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlsberg and CONAGRA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and CONAGRA FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONAGRA FOODS and Carlsberg A/S 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 Carlsberg AS are associated (or correlated) with CONAGRA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONAGRA FOODS has no effect on the direction of Carlsberg A/S i.e., Carlsberg A/S and CONAGRA FOODS go up and down completely randomly.
Pair Corralation between Carlsberg A/S and CONAGRA FOODS
Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the CONAGRA FOODS. In addition to that, Carlsberg A/S is 1.24 times more volatile than CONAGRA FOODS. It trades about -0.09 of its total potential returns per unit of risk. CONAGRA FOODS is currently generating about -0.07 per unit of volatility. If you would invest 2,661 in CONAGRA FOODS on September 1, 2024 and sell it today you would lose (53.00) from holding CONAGRA FOODS or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Carlsberg AS vs. CONAGRA FOODS
Performance |
| Timeline |
| Carlsberg A/S |
| CONAGRA FOODS |
Carlsberg A/S and CONAGRA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg A/S and CONAGRA FOODS
The main advantage of trading using opposite Carlsberg A/S and CONAGRA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg A/S position performs unexpectedly, CONAGRA FOODS 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 CONAGRA FOODS will offset losses from the drop in CONAGRA FOODS's long position.| Carlsberg A/S vs. RCM TECHNOLOGIES | Carlsberg A/S vs. GLG LIFE TECH | Carlsberg A/S vs. PKSHA TECHNOLOGY INC | Carlsberg A/S vs. Lion Biotechnologies |
| CONAGRA FOODS vs. SIVERS SEMICONDUCTORS AB | CONAGRA FOODS vs. Darden Restaurants | CONAGRA FOODS vs. Reliance Steel Aluminum | CONAGRA FOODS vs. Q2M Managementberatung AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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