Correlation Between Blue Star and ConAgra Foods

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

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

Diversification Opportunities for Blue Star and ConAgra Foods

0.88

Correlation Coefficient

Blue Star  ConAgra Foods

Very poor diversification

The 3 months correlation between Blue and ConAgra is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Blue Star 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 Blue Star Foods 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 Blue Star i.e., Blue Star and ConAgra Foods go up and down completely randomly.

Pair Corralation between Blue Star and ConAgra Foods

Given the investment horizon of 90 days Blue Star Foods is expected to under-perform the ConAgra Foods. In addition to that, Blue Star is 8.24 times more volatile than ConAgra Foods. It trades about -0.09 of its total potential returns per unit of risk. ConAgra Foods is currently generating about -0.03 per unit of volatility. If you would invest  3,549  in ConAgra Foods on September 12, 2024 and sell it today you would lose (755.00) from holding ConAgra Foods or give up 21.27% of portfolio value over 90 days.

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

Blue Star Foods  vs.  ConAgra Foods

Blue Star Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Star Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ConAgra Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ConAgra Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Blue Star and ConAgra Foods

The main advantage of trading using opposite Blue Star and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star 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 Blue Star Foods 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.