Correlation Between Pfizer and CONAGRA

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

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

Diversification Opportunities for Pfizer and CONAGRA

0.44

Correlation Coefficient

Pfizer  CONAGRA

Very weak diversification

The 3 months correlation between Pfizer and CONAGRA is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and CONAGRA BRANDS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONAGRA BRANDS INC and Pfizer 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 Pfizer Inc are associated (or correlated) with CONAGRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONAGRA BRANDS INC has no effect on the direction of Pfizer i.e., Pfizer and CONAGRA go up and down completely randomly.

Pair Corralation between Pfizer and CONAGRA

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the CONAGRA. In addition to that, Pfizer is 2.5 times more volatile than CONAGRA BRANDS INC. It trades about -0.14 of its total potential returns per unit of risk. CONAGRA BRANDS INC is currently generating about -0.08 per unit of volatility. If you would invest  9,905  in CONAGRA BRANDS INC on September 11, 2024 and sell it today you would lose (265.00) from holding CONAGRA BRANDS INC or give up 2.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Pfizer Inc  vs.  CONAGRA BRANDS INC

Pfizer Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

CONAGRA BRANDS INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONAGRA BRANDS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CONAGRA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pfizer and CONAGRA

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

The idea behind Pfizer Inc and CONAGRA BRANDS INC 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.