Correlation Between Wing Yip and ConAgra Foods

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

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

Diversification Opportunities for Wing Yip and ConAgra Foods

-0.29

Correlation Coefficient

Wing Yip  ConAgra Foods

Very good diversification

The 3 months correlation between Wing and ConAgra is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Wing Yip 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 Wing Yip Food 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 Wing Yip i.e., Wing Yip and ConAgra Foods go up and down completely randomly.

Pair Corralation between Wing Yip and ConAgra Foods

Given the investment horizon of 90 days Wing Yip Food is expected to under-perform the ConAgra Foods. In addition to that, Wing Yip is 8.09 times more volatile than ConAgra Foods. It trades about -0.05 of its total potential returns per unit of risk. ConAgra Foods is currently generating about -0.18 per unit of volatility. If you would invest  2,773  in ConAgra Foods on October 12, 2024 and sell it today you would lose (113.00) from holding ConAgra Foods or give up 4.08% of portfolio value over 90 days.

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

Wing Yip Food  vs.  ConAgra Foods

Wing Yip Food

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wing Yip Food are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Wing Yip reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Wing Yip and ConAgra Foods

The main advantage of trading using opposite Wing Yip and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wing Yip 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 Wing Yip Food 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.

Check out your portfolio center.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.