Correlation Between ConAgra Foods and Limoneira

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

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

Diversification Opportunities for ConAgra Foods and Limoneira

0.15

Correlation Coefficient

ConAgra Foods  Limoneira

Average diversification

The 3 months correlation between ConAgra and Limoneira is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira 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 Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Limoneira go up and down completely randomly.

Pair Corralation between ConAgra Foods and Limoneira

Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.77 times more return on investment than Limoneira. However, ConAgra Foods is 1.29 times less risky than Limoneira. It trades about -0.01 of its potential returns per unit of risk. Limoneira Co is currently generating about -0.2 per unit of risk. If you would invest  2,717  in ConAgra Foods on December 30, 2024 and sell it today you would lose (62.00) from holding ConAgra Foods or give up 2.28% of portfolio value over 90 days.

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

ConAgra Foods  vs.  Limoneira Co

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 nearly stable basic indicators, ConAgra Foods is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Limoneira

Risk-Adjusted Performance

Very Weak

Over the last 90 days Limoneira Co has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ConAgra Foods and Limoneira

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

The idea behind ConAgra Foods and Limoneira Co 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.