Correlation Between China Mengniu and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both China Mengniu 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 China Mengniu and ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mengniu Dairy and ConAgra Foods, you can compare the effects of market volatilities on China Mengniu 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 China Mengniu with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and ConAgra Foods.
Diversification Opportunities for China Mengniu and ConAgra Foods
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and ConAgra is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and China Mengniu 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 China Mengniu Dairy 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 China Mengniu i.e., China Mengniu and ConAgra Foods go up and down completely randomly.
Pair Corralation between China Mengniu and ConAgra Foods
Assuming the 90 days horizon China Mengniu Dairy is expected to under-perform the ConAgra Foods. In addition to that, China Mengniu is 1.88 times more volatile than ConAgra Foods. It trades about -0.11 of its total potential returns per unit of risk. ConAgra Foods is currently generating about -0.04 per unit of volatility. If you would invest 3,549 in ConAgra Foods on January 17, 2024 and sell it today you would lose (573.00) from holding ConAgra Foods or give up 16.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.68% |
| Values | Daily Returns |
China Mengniu Dairy vs. ConAgra Foods
Performance |
| Timeline |
| China Mengniu Dairy |
| ConAgra Foods |
China Mengniu and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and ConAgra Foods
The main advantage of trading using opposite China Mengniu and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu 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 China Mengniu Dairy 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. Seneca Foods Corp | ConAgra Foods vs. Central Garden Pet | ConAgra Foods vs. Central Garden Pet | ConAgra Foods vs. Aryzta AG PK |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |