Correlation Between Nomad Foods and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both Nomad Foods 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 Nomad Foods and ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and ConAgra Foods, you can compare the effects of market volatilities on Nomad Foods 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 Nomad Foods with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and ConAgra Foods.
Diversification Opportunities for Nomad Foods and ConAgra Foods
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nomad and ConAgra is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Nomad Foods 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 Nomad Foods 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 Nomad Foods i.e., Nomad Foods and ConAgra Foods go up and down completely randomly.
Pair Corralation between Nomad Foods and ConAgra Foods
Given the investment horizon of 90 days Nomad Foods is expected to generate 1.22 times more return on investment than ConAgra Foods. However, Nomad Foods is 1.22 times more volatile than ConAgra Foods. It trades about 0.02 of its potential returns per unit of risk. ConAgra Foods is currently generating about -0.02 per unit of risk. If you would invest 1,709 in Nomad Foods on August 26, 2024 and sell it today you would earn a total of 68.00 from holding Nomad Foods or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. ConAgra Foods
Performance |
| Timeline |
| Nomad Foods |
| ConAgra Foods |
Nomad Foods and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and ConAgra Foods
The main advantage of trading using opposite Nomad Foods and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods 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.| Nomad Foods vs. Lancaster Colony | Nomad Foods vs. Treehouse Foods | Nomad Foods vs. John B Sanfilippo | Nomad Foods vs. Seneca Foods Corp |
| ConAgra Foods vs. Bellring Brands LLC | ConAgra Foods vs. Ingredion Incorporated | ConAgra Foods vs. Nomad Foods | ConAgra Foods vs. Post Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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