Correlation Between Nuzee and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both Nuzee 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 Nuzee and ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuzee Inc and ConAgra Foods, you can compare the effects of market volatilities on Nuzee 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 Nuzee with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuzee and ConAgra Foods.
Diversification Opportunities for Nuzee and ConAgra Foods
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nuzee and ConAgra is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nuzee Inc and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Nuzee 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 Nuzee Inc 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 Nuzee i.e., Nuzee and ConAgra Foods go up and down completely randomly.
Pair Corralation between Nuzee and ConAgra Foods
Given the investment horizon of 90 days Nuzee Inc is expected to generate 51.68 times more return on investment than ConAgra Foods. However, Nuzee is 51.68 times more volatile than ConAgra Foods. It trades about 0.1 of its potential returns per unit of risk. ConAgra Foods is currently generating about -0.12 per unit of risk. If you would invest 124.00 in Nuzee Inc on August 28, 2024 and sell it today you would lose (25.00) from holding Nuzee Inc or give up 20.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 74.6% |
| Values | Daily Returns |
Nuzee Inc vs. ConAgra Foods
Performance |
| Timeline |
| Nuzee Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| ConAgra Foods |
Nuzee and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuzee and ConAgra Foods
The main advantage of trading using opposite Nuzee and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuzee 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.The idea behind Nuzee Inc and ConAgra Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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