Correlation Between CONAGRA FOODS and TYSON FOODS

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

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

Diversification Opportunities for CONAGRA FOODS and TYSON FOODS

-0.54

Correlation Coefficient

CONAGRA FOODS  TYSON FOODS

Excellent diversification

The 3 months correlation between CONAGRA and TYSON is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and TYSON FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TYSON FOODS A 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 TYSON FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TYSON FOODS A has no effect on the direction of CONAGRA FOODS i.e., CONAGRA FOODS and TYSON FOODS go up and down completely randomly.

Pair Corralation between CONAGRA FOODS and TYSON FOODS

Assuming the 90 days trading horizon CONAGRA FOODS is expected to generate 2.31 times less return on investment than TYSON FOODS. But when comparing it to its historical volatility, CONAGRA FOODS is 1.31 times less risky than TYSON FOODS. It trades about 0.05 of its potential returns per unit of risk. TYSON FOODS A is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,265  in TYSON FOODS A on October 6, 2024 and sell it today you would earn a total of  368.00  from holding TYSON FOODS A or generate 6.99% 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.  TYSON FOODS A

CONAGRA FOODS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CONAGRA FOODS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CONAGRA FOODS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

TYSON FOODS A

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TYSON FOODS A are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, TYSON FOODS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CONAGRA FOODS and TYSON FOODS

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

The idea behind CONAGRA FOODS and TYSON FOODS A 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.