Correlation Between ConAgra Foods and WH Group
Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and WH Group 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 WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and WH Group Ltd, you can compare the effects of market volatilities on ConAgra Foods and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and WH Group.
Diversification Opportunities for ConAgra Foods and WH Group
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ConAgra and WHGLY is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and WH Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and WH Group go up and down completely randomly.
Pair Corralation between ConAgra Foods and WH Group
Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.89 times more return on investment than WH Group. However, ConAgra Foods is 1.13 times less risky than WH Group. It trades about 0.15 of its potential returns per unit of risk. WH Group Ltd is currently generating about 0.12 per unit of risk. If you would invest 2,884 in ConAgra Foods on January 20, 2024 and sell it today you would earn a total of 152.00 from holding ConAgra Foods or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ConAgra Foods vs. WH Group Ltd
Performance |
| Timeline |
| ConAgra Foods |
| WH Group |
ConAgra Foods and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConAgra Foods and WH Group
The main advantage of trading using opposite ConAgra Foods and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group'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 |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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