Correlation Between Ingredion Incorporated and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated 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 Ingredion Incorporated and ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and ConAgra Foods, you can compare the effects of market volatilities on Ingredion Incorporated 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 Ingredion Incorporated with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and ConAgra Foods.
Diversification Opportunities for Ingredion Incorporated and ConAgra Foods
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ingredion and ConAgra is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated i.e., Ingredion Incorporated and ConAgra Foods go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and ConAgra Foods
Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 3.3 times more return on investment than ConAgra Foods. However, Ingredion Incorporated is 3.3 times more volatile than ConAgra Foods. It trades about 0.14 of its potential returns per unit of risk. ConAgra Foods is currently generating about -0.28 per unit of risk. If you would invest 13,484 in Ingredion Incorporated on August 28, 2024 and sell it today you would earn a total of 1,344 from holding Ingredion Incorporated or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingredion Incorporated vs. ConAgra Foods
Performance |
| Timeline |
| Ingredion Incorporated |
| ConAgra Foods |
Ingredion Incorporated and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and ConAgra Foods
The main advantage of trading using opposite Ingredion Incorporated and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated 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.| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
| ConAgra Foods vs. Bellring Brands LLC | ConAgra Foods vs. Ingredion Incorporated | ConAgra Foods vs. Nomad Foods | ConAgra Foods vs. Simply Good 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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