Correlation Between CONAGRA and InMode

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

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

Diversification Opportunities for CONAGRA and InMode

0.38

Correlation Coefficient

CONAGRA  InMode

Weak diversification

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

Pair Corralation between CONAGRA and InMode

Assuming the 90 days trading horizon CONAGRA BRANDS INC is expected to generate 0.37 times more return on investment than InMode. However, CONAGRA BRANDS INC is 2.67 times less risky than InMode. It trades about 0.02 of its potential returns per unit of risk. InMode is currently generating about -0.03 per unit of risk. If you would invest  9,455  in CONAGRA BRANDS INC on October 22, 2024 and sell it today you would earn a total of  280.00  from holding CONAGRA BRANDS INC or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.68%
Values	Daily Returns

CONAGRA BRANDS INC  vs.  InMode

CONAGRA BRANDS INC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CONAGRA BRANDS INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CONAGRA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

InMode

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CONAGRA and InMode

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

The idea behind CONAGRA BRANDS INC and InMode 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 Transaction History module to view history of all your transactions and understand their impact on performance.