Correlation Between JAPAN TOBACCO and CONAGRA FOODS
Can any of the company-specific risk be diversified away by investing in both JAPAN TOBACCO 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 JAPAN TOBACCO and CONAGRA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN TOBACCO UNSPADR12 and CONAGRA FOODS, you can compare the effects of market volatilities on JAPAN TOBACCO 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 JAPAN TOBACCO with a short position of CONAGRA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN TOBACCO and CONAGRA FOODS.
Diversification Opportunities for JAPAN TOBACCO and CONAGRA FOODS
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between JAPAN and CONAGRA is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN TOBACCO UNSPADR12 and CONAGRA FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONAGRA FOODS and JAPAN TOBACCO 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 JAPAN TOBACCO UNSPADR12 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 JAPAN TOBACCO i.e., JAPAN TOBACCO and CONAGRA FOODS go up and down completely randomly.
Pair Corralation between JAPAN TOBACCO and CONAGRA FOODS
Assuming the 90 days trading horizon JAPAN TOBACCO UNSPADR12 is expected to under-perform the CONAGRA FOODS. In addition to that, JAPAN TOBACCO is 1.18 times more volatile than CONAGRA FOODS. It trades about -0.1 of its total potential returns per unit of risk. CONAGRA FOODS is currently generating about -0.04 per unit of volatility. If you would invest 2,643 in CONAGRA FOODS on October 14, 2024 and sell it today you would lose (88.00) from holding CONAGRA FOODS or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN TOBACCO UNSPADR12 vs. CONAGRA FOODS
Performance |
| Timeline |
| JAPAN TOBACCO UNSPADR12 |
| CONAGRA FOODS |
JAPAN TOBACCO and CONAGRA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN TOBACCO and CONAGRA FOODS
The main advantage of trading using opposite JAPAN TOBACCO and CONAGRA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN TOBACCO 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.| JAPAN TOBACCO vs. Luckin Coffee | JAPAN TOBACCO vs. BE Semiconductor Industries | JAPAN TOBACCO vs. Siamgas And Petrochemicals | JAPAN TOBACCO vs. COFCO Joycome Foods |
| CONAGRA FOODS vs. TOMBADOR IRON LTD | CONAGRA FOODS vs. Magnachip Semiconductor | CONAGRA FOODS vs. Khiron Life Sciences | CONAGRA FOODS vs. ANGANG STEEL H |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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