Correlation Between ConAgra Foods and Beyond Meat

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

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

Diversification Opportunities for ConAgra Foods and Beyond Meat

-0.34

Correlation Coefficient

ConAgra Foods  Beyond Meat

Very good diversification

The 3 months correlation between ConAgra and Beyond is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat and ConAgra Foods 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 Foods are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Beyond Meat go up and down completely randomly.

Pair Corralation between ConAgra Foods and Beyond Meat

Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.24 times more return on investment than Beyond Meat. However, ConAgra Foods is 4.11 times less risky than Beyond Meat. It trades about 0.0 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.04 per unit of risk. If you would invest  3,199  in ConAgra Foods on January 25, 2024 and sell it today you would lose (42.00) from holding ConAgra Foods or give up 1.31% of portfolio value over 90 days.

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

ConAgra Foods  vs.  Beyond Meat

ConAgra Foods

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ConAgra Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, ConAgra Foods may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Beyond Meat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Meat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Beyond Meat is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ConAgra Foods and Beyond Meat

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

The idea behind ConAgra Foods and Beyond Meat 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.