Correlation Between ConAgra Foods and Davidstea
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Davidstea 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 ConAgra Foods and Davidstea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and Davidstea, you can compare the effects of market volatilities on ConAgra Foods and Davidstea 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 ConAgra Foods with a short position of Davidstea. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Davidstea.
Diversification Opportunities for ConAgra Foods and Davidstea
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ConAgra and Davidstea is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Davidstea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davidstea and ConAgra 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 ConAgra Foods are associated (or correlated) with Davidstea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davidstea has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Davidstea go up and down completely randomly.
Pair Corralation between ConAgra Foods and Davidstea
Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.2 times more return on investment than Davidstea. However, ConAgra Foods is 5.08 times less risky than Davidstea. It trades about 0.0 of its potential returns per unit of risk. Davidstea is currently generating about -0.06 per unit of risk. If you would invest 3,159 in ConAgra Foods on January 19, 2024 and sell it today you would lose (173.00) from holding ConAgra Foods or give up 5.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.95% |
| Values | Daily Returns |
ConAgra Foods vs. Davidstea
Performance |
| Timeline |
| ConAgra Foods |
| Davidstea |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ConAgra Foods and Davidstea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and Davidstea
The main advantage of trading using opposite ConAgra Foods and Davidstea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Davidstea 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 Davidstea will offset losses from the drop in Davidstea's long position.| ConAgra Foods vs. Central Garden Pet | ConAgra Foods vs. Central Garden Pet | ConAgra Foods vs. The A2 Milk | ConAgra Foods vs. Altavoz Entertainment |
| Davidstea vs. Natures Sunshine Products | Davidstea vs. Bridgford Foods | Davidstea vs. Lifeway Foods | Davidstea vs. Central Garden Pet |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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