Correlation Between ConAgra Foods and Bellring Brands

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

By analyzing existing cross correlation between ConAgra Foods and Bellring Brands LLC, you can compare the effects of market volatilities on ConAgra Foods and Bellring Brands 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 Bellring Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Bellring Brands.

Diversification Opportunities for ConAgra Foods and Bellring Brands

-0.61

Correlation Coefficient

ConAgra Foods  Bellring Brands

Excellent diversification

The 3 months correlation between ConAgra and Bellring is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Bellring Brands LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellring Brands LLC 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 Bellring Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellring Brands LLC has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Bellring Brands go up and down completely randomly.

Pair Corralation between ConAgra Foods and Bellring Brands

Considering the 90-day investment horizon ConAgra Foods is expected to under-perform the Bellring Brands. In addition to that, ConAgra Foods is 1.02 times more volatile than Bellring Brands LLC. It trades about -0.31 of its total potential returns per unit of risk. Bellring Brands LLC is currently generating about -0.25 per unit of volatility. If you would invest  7,614  in Bellring Brands LLC on October 22, 2024 and sell it today you would lose (375.00) from holding Bellring Brands LLC or give up 4.93% of portfolio value over 90 days.

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

ConAgra Foods  vs.  Bellring Brands LLC

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.

Bellring Brands LLC

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bellring Brands LLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental drivers, Bellring Brands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ConAgra Foods and Bellring Brands

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

The idea behind ConAgra Foods and Bellring Brands LLC 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.