Correlation Between ConAgra Foods and Kellanova
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Kellanova 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 Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and Kellanova, you can compare the effects of market volatilities on ConAgra Foods and Kellanova 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 Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Kellanova.
Diversification Opportunities for ConAgra Foods and Kellanova
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ConAgra and Kellanova is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova 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 Kellanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellanova has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Kellanova go up and down completely randomly.
Pair Corralation between ConAgra Foods and Kellanova
Considering the 90-day investment horizon ConAgra Foods is expected to generate 1.21 times more return on investment than Kellanova. However, ConAgra Foods is 1.21 times more volatile than Kellanova. It trades about 0.08 of its potential returns per unit of risk. Kellanova is currently generating about 0.08 per unit of risk. If you would invest 2,839 in ConAgra Foods on January 20, 2024 and sell it today you would earn a total of 197.00 from holding ConAgra Foods or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConAgra Foods vs. Kellanova
Performance |
| Timeline |
| ConAgra Foods |
| Kellanova |
ConAgra Foods and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and Kellanova
The main advantage of trading using opposite ConAgra Foods and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Kellanova 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 Kellanova will offset losses from the drop in Kellanova's long position.| ConAgra Foods vs. Green Globe International | ConAgra Foods vs. Greenlane Holdings | ConAgra Foods vs. RLX Technology | ConAgra Foods vs. 22nd Century Group |
| Kellanova vs. Green Globe International | Kellanova vs. Greenlane Holdings | Kellanova vs. RLX Technology | Kellanova vs. 22nd Century Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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