Correlation Between ConAgra Foods and Wing Yip

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

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

Diversification Opportunities for ConAgra Foods and Wing Yip

-0.29

Correlation Coefficient

ConAgra Foods  Wing Yip

Very good diversification

The 3 months correlation between ConAgra and Wing is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Wing Yip Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wing Yip Food 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 Wing Yip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wing Yip Food has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Wing Yip go up and down completely randomly.

Pair Corralation between ConAgra Foods and Wing Yip

Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.12 times more return on investment than Wing Yip. However, ConAgra Foods is 8.09 times less risky than Wing Yip. It trades about -0.18 of its potential returns per unit of risk. Wing Yip Food is currently generating about -0.05 per unit of risk. If you would invest  2,773  in ConAgra Foods on October 12, 2024 and sell it today you would lose (113.00) from holding ConAgra Foods or give up 4.08% of portfolio value over 90 days.

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

ConAgra Foods  vs.  Wing Yip Food

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.

Wing Yip Food

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wing Yip Food are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Wing Yip reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ConAgra Foods and Wing Yip

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

The idea behind ConAgra Foods and Wing Yip Food 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.