Correlation Between CONAGRA FOODS and Perma-Fix Environmental

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

By analyzing existing cross correlation between CONAGRA FOODS and Perma Fix Environmental Services, you can compare the effects of market volatilities on CONAGRA FOODS and Perma-Fix Environmental 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 Perma-Fix Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONAGRA FOODS and Perma-Fix Environmental.

Diversification Opportunities for CONAGRA FOODS and Perma-Fix Environmental

0.38

Correlation Coefficient

CONAGRA FOODS  Perma-Fix Environmental

Weak diversification

The 3 months correlation between CONAGRA and Perma-Fix is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and Perma Fix Environmental Servic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental 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 Perma-Fix Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of CONAGRA FOODS i.e., CONAGRA FOODS and Perma-Fix Environmental go up and down completely randomly.

Pair Corralation between CONAGRA FOODS and Perma-Fix Environmental

Assuming the 90 days trading horizon CONAGRA FOODS is expected to under-perform the Perma-Fix Environmental. But the stock apears to be less risky and, when comparing its historical volatility, CONAGRA FOODS is 1.6 times less risky than Perma-Fix Environmental. The stock trades about -0.21 of its potential returns per unit of risk. The Perma Fix Environmental Services is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,010  in Perma Fix Environmental Services on October 23, 2024 and sell it today you would earn a total of  40.00  from holding Perma Fix Environmental Services or generate 3.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

CONAGRA FOODS  vs.  Perma Fix Environmental Servic

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. In spite of latest unfluctuating 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.

Perma Fix Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perma Fix Environmental Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CONAGRA FOODS and Perma-Fix Environmental

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

The idea behind CONAGRA FOODS and Perma Fix Environmental Services 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.