Correlation Between Freshpet and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both Freshpet 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 Freshpet and ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freshpet and ConAgra Foods, you can compare the effects of market volatilities on Freshpet 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 Freshpet with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freshpet and ConAgra Foods.
Diversification Opportunities for Freshpet and ConAgra Foods
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Freshpet and ConAgra is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Freshpet and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Freshpet 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 Freshpet 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 Freshpet i.e., Freshpet and ConAgra Foods go up and down completely randomly.
Pair Corralation between Freshpet and ConAgra Foods
Given the investment horizon of 90 days Freshpet is expected to generate 1.93 times more return on investment than ConAgra Foods. However, Freshpet is 1.93 times more volatile than ConAgra Foods. It trades about 0.1 of its potential returns per unit of risk. ConAgra Foods is currently generating about -0.03 per unit of risk. If you would invest 5,579 in Freshpet on September 2, 2024 and sell it today you would earn a total of 9,726 from holding Freshpet or generate 174.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freshpet vs. ConAgra Foods
Performance |
| Timeline |
| Freshpet |
| ConAgra Foods |
Freshpet and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freshpet and ConAgra Foods
The main advantage of trading using opposite Freshpet and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freshpet 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' long position.| Freshpet vs. Post Holdings | Freshpet vs. Simply Good Foods | Freshpet vs. Treehouse Foods | Freshpet vs. J J Snack |
| ConAgra Foods vs. Kellanova | ConAgra Foods vs. General Mills | ConAgra Foods vs. JM Smucker | ConAgra Foods vs. Hormel Foods |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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