Correlation Between Apogee Enterprises and CONAGRA

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

By analyzing existing cross correlation between Apogee Enterprises and CONAGRA BRANDS INC, you can compare the effects of market volatilities on Apogee Enterprises and CONAGRA 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 Apogee Enterprises with a short position of CONAGRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and CONAGRA.

Diversification Opportunities for Apogee Enterprises and CONAGRA

-0.65

Correlation Coefficient

Apogee Enterprises  CONAGRA

Excellent diversification

The 3 months correlation between Apogee and CONAGRA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and CONAGRA BRANDS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONAGRA BRANDS INC and Apogee Enterprises 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 Apogee Enterprises are associated (or correlated) with CONAGRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONAGRA BRANDS INC has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and CONAGRA go up and down completely randomly.

Pair Corralation between Apogee Enterprises and CONAGRA

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 5.91 times more return on investment than CONAGRA. However, Apogee Enterprises is 5.91 times more volatile than CONAGRA BRANDS INC. It trades about 0.12 of its potential returns per unit of risk. CONAGRA BRANDS INC is currently generating about -0.06 per unit of risk. If you would invest  6,308  in Apogee Enterprises on September 12, 2024 and sell it today you would earn a total of  1,692  from holding Apogee Enterprises or generate 26.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Apogee Enterprises  vs.  CONAGRA BRANDS INC

Apogee Enterprises

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Apogee Enterprises reported solid returns over the last few months and may actually be approaching a breakup point.

CONAGRA BRANDS INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONAGRA BRANDS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CONAGRA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apogee Enterprises and CONAGRA

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

The idea behind Apogee Enterprises and CONAGRA BRANDS INC 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 Positions Ratings module to 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.