Correlation Between CONAGRA FOODS and LANSON BCC

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

By analyzing existing cross correlation between CONAGRA FOODS and LANSON BCC INH EO, you can compare the effects of market volatilities on CONAGRA FOODS and LANSON BCC 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 LANSON BCC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONAGRA FOODS and LANSON BCC.

Diversification Opportunities for CONAGRA FOODS and LANSON BCC

-0.4

Correlation Coefficient

CONAGRA FOODS  LANSON BCC

Very good diversification

The 3 months correlation between CONAGRA and LANSON is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and LANSON BCC INH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANSON BCC INH 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 LANSON BCC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANSON BCC INH has no effect on the direction of CONAGRA FOODS i.e., CONAGRA FOODS and LANSON BCC go up and down completely randomly.

Pair Corralation between CONAGRA FOODS and LANSON BCC

Assuming the 90 days trading horizon CONAGRA FOODS is expected to under-perform the LANSON BCC. In addition to that, CONAGRA FOODS is 1.21 times more volatile than LANSON BCC INH EO. It trades about -0.08 of its total potential returns per unit of risk. LANSON BCC INH EO is currently generating about 0.07 per unit of volatility. If you would invest  3,460  in LANSON BCC INH EO on December 24, 2024 and sell it today you would earn a total of  210.00  from holding LANSON BCC INH EO or generate 6.07% return on investment over 90 days.

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

CONAGRA FOODS  vs.  LANSON BCC INH EO

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. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

LANSON BCC INH

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LANSON BCC INH EO are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, LANSON BCC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CONAGRA FOODS and LANSON BCC

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

The idea behind CONAGRA FOODS and LANSON BCC INH EO 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.