Correlation Between Mamas Creations and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both Mamas Creations 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 Mamas Creations and ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mamas Creations and ConAgra Foods, you can compare the effects of market volatilities on Mamas Creations 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 Mamas Creations with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mamas Creations and ConAgra Foods.
Diversification Opportunities for Mamas Creations and ConAgra Foods
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mamas and ConAgra is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mamas Creations and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Mamas Creations 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 Mamas Creations 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 Mamas Creations i.e., Mamas Creations and ConAgra Foods go up and down completely randomly.
Pair Corralation between Mamas Creations and ConAgra Foods
Given the investment horizon of 90 days Mamas Creations is expected to generate 2.23 times more return on investment than ConAgra Foods. However, Mamas Creations is 2.23 times more volatile than ConAgra Foods. It trades about 0.11 of its potential returns per unit of risk. ConAgra Foods is currently generating about -0.02 per unit of risk. If you would invest 679.00 in Mamas Creations on September 5, 2024 and sell it today you would earn a total of 306.00 from holding Mamas Creations or generate 45.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mamas Creations vs. ConAgra Foods
Performance |
| Timeline |
| Mamas Creations |
| ConAgra Foods |
Mamas Creations and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mamas Creations and ConAgra Foods
The main advantage of trading using opposite Mamas Creations and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mamas Creations 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.| Mamas Creations vs. Hormel Foods | Mamas Creations vs. McCormick Company Incorporated | Mamas Creations vs. Lamb Weston Holdings | Mamas Creations vs. JM Smucker |
| ConAgra Foods vs. Hormel Foods | ConAgra Foods vs. McCormick Company Incorporated | ConAgra Foods vs. Lamb Weston Holdings | ConAgra Foods vs. JM Smucker |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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