Correlation Between ConAgra Foods and Premier Foods

Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Premier 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 ConAgra Foods and Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ConAgra Foods and Premier Foods Plc, you can compare the effects of market volatilities on ConAgra Foods and Premier 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 ConAgra Foods with a short position of Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Premier Foods.

Diversification Opportunities for ConAgra Foods and Premier Foods

0.56

Correlation Coefficient

ConAgra Foods  Premier Foods

Very weak diversification

The 3 months correlation between ConAgra and Premier is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Premier Foods Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods Plc 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 Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods Plc has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Premier Foods go up and down completely randomly.

Pair Corralation between ConAgra Foods and Premier Foods

Considering the 90-day investment horizon ConAgra Foods is expected to under-perform the Premier Foods. But the stock apears to be less risky and, when comparing its historical volatility, ConAgra Foods is 1.45 times less risky than Premier Foods. The stock trades about -0.23 of its potential returns per unit of risk. The Premier Foods Plc is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,360  in Premier Foods Plc on May 4, 2025 and sell it today you would lose (107.00) from holding Premier Foods Plc or give up 7.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ConAgra Foods  vs.  Premier Foods Plc

ConAgra Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days ConAgra Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Premier Foods Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Premier Foods Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ConAgra Foods and Premier Foods

The main advantage of trading using opposite ConAgra Foods and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Premier 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 Premier Foods will offset losses from the drop in Premier Foods' long position.

The idea behind ConAgra Foods and Premier Foods Plc 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.