Correlation Between ConAgra Foods and Smart For

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

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

Diversification Opportunities for ConAgra Foods and Smart For

0.84

Correlation Coefficient

ConAgra Foods  Smart For

Very poor diversification

The 3 months correlation between ConAgra and Smart is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Smart for Life, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart for Life, 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 Smart For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart for Life, has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Smart For go up and down completely randomly.

Pair Corralation between ConAgra Foods and Smart For

Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.05 times more return on investment than Smart For. However, ConAgra Foods is 18.74 times less risky than Smart For. It trades about -0.12 of its potential returns per unit of risk. Smart for Life, is currently generating about -0.69 per unit of risk. If you would invest  3,137  in ConAgra Foods on September 12, 2024 and sell it today you would lose (353.00) from holding ConAgra Foods or give up 11.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	18.75%
Values	Daily Returns

ConAgra Foods  vs.  Smart for Life,

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.

Smart for Life,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart for Life, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ConAgra Foods and Smart For

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

The idea behind ConAgra Foods and Smart for Life, 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.