Correlation Between Kraft Heinz and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz 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 Kraft Heinz and ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Heinz Co and ConAgra Foods, you can compare the effects of market volatilities on Kraft Heinz 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 Kraft Heinz with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and ConAgra Foods.
Diversification Opportunities for Kraft Heinz and ConAgra Foods
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kraft and ConAgra is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Kraft Heinz 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 Kraft Heinz Co 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 Kraft Heinz i.e., Kraft Heinz and ConAgra Foods go up and down completely randomly.
Pair Corralation between Kraft Heinz and ConAgra Foods
Considering the 90-day investment horizon Kraft Heinz Co is expected to under-perform the ConAgra Foods. But the stock apears to be less risky and, when comparing its historical volatility, Kraft Heinz Co is 1.18 times less risky than ConAgra Foods. The stock trades about -0.03 of its potential returns per unit of risk. The ConAgra Foods is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,848 in ConAgra Foods on August 28, 2024 and sell it today you would lose (103.00) from holding ConAgra Foods or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. ConAgra Foods
Performance |
| Timeline |
| Kraft Heinz |
| ConAgra Foods |
Kraft Heinz and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and ConAgra Foods
The main advantage of trading using opposite Kraft Heinz and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz 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.| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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