Correlation Between Calbee and ConAgra Foods

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

By analyzing existing cross correlation between Calbee Inc and ConAgra Foods, you can compare the effects of market volatilities on Calbee and ConAgra 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 Calbee with a short position of ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calbee and ConAgra Foods.

Diversification Opportunities for Calbee and ConAgra Foods

0.8

Correlation Coefficient

Calbee  ConAgra Foods

Very poor diversification

The 3 months correlation between Calbee and ConAgra is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Calbee Inc and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Calbee 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 Calbee Inc are associated (or correlated) with ConAgra Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConAgra Foods has no effect on the direction of Calbee i.e., Calbee and ConAgra Foods go up and down completely randomly.

Pair Corralation between Calbee and ConAgra Foods

Assuming the 90 days horizon Calbee Inc is expected to generate 1.91 times more return on investment than ConAgra Foods. However, Calbee is 1.91 times more volatile than ConAgra Foods. It trades about 0.1 of its potential returns per unit of risk. ConAgra Foods is currently generating about 0.05 per unit of risk. If you would invest  497.00  in Calbee Inc on September 20, 2024 and sell it today you would earn a total of  21.00  from holding Calbee Inc or generate 4.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Calbee Inc  vs.  ConAgra Foods

Calbee Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calbee Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Calbee and ConAgra Foods

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

The idea behind Calbee Inc and ConAgra Foods 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.