Correlation Between HOYA and CONAGRA FOODS

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

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

Diversification Opportunities for HOYA and CONAGRA FOODS

-0.38

Correlation Coefficient

HOYA  CONAGRA FOODS

Very good diversification

The 3 months correlation between HOYA and CONAGRA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding HOYA Corp. and CONAGRA FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONAGRA FOODS and HOYA 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 HOYA Corporation 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 HOYA i.e., HOYA and CONAGRA FOODS go up and down completely randomly.

Pair Corralation between HOYA and CONAGRA FOODS

Assuming the 90 days horizon HOYA Corporation is expected to under-perform the CONAGRA FOODS. In addition to that, HOYA is 1.72 times more volatile than CONAGRA FOODS. It trades about -0.01 of its total potential returns per unit of risk. CONAGRA FOODS is currently generating about 0.02 per unit of volatility. If you would invest  2,635  in CONAGRA FOODS on October 3, 2024 and sell it today you would earn a total of  21.00  from holding CONAGRA FOODS or generate 0.8% return on investment over 90 days.

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

HOYA Corp.  vs.  CONAGRA FOODS

HOYA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HOYA Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HOYA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CONAGRA FOODS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CONAGRA FOODS are ranked lower than 1 (%) 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.

Pair Trading with HOYA and CONAGRA FOODS

The main advantage of trading using opposite HOYA and CONAGRA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOYA 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's long position.

The idea behind HOYA Corporation 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.