Correlation Between ConAgra Foods and Dave

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Can any of the company-specific risk be diversified away by investing in both ConAgra Foods and Dave 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 Dave into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConAgra Foods and Dave Inc, you can compare the effects of market volatilities on ConAgra Foods and Dave 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 Dave. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConAgra Foods and Dave.

Diversification Opportunities for ConAgra Foods and Dave

  Correlation Coefficient

Weak diversification

The 3 months correlation between ConAgra and Dave is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ConAgra Foods and Dave Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Inc 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 Dave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Inc has no effect on the direction of ConAgra Foods i.e., ConAgra Foods and Dave go up and down completely randomly.

Pair Corralation between ConAgra Foods and Dave

Considering the 90-day investment horizon ConAgra Foods is expected to generate 0.28 times more return on investment than Dave. However, ConAgra Foods is 3.61 times less risky than Dave. It trades about 0.06 of its potential returns per unit of risk. Dave Inc is currently generating about -0.43 per unit of risk. If you would invest  3,676  in ConAgra Foods on December 27, 2022 and sell it today you would earn a total of  43.00  from holding ConAgra Foods or generate 1.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

ConAgra Foods  vs.  Dave Inc

 Performance (%) 
ConAgra Foods 

ConAgra Performance

0 of 100

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

Dave Performance

0 of 100

Over the last 90 days Dave Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ConAgra Foods and Dave Volatility Contrast

   Predicted Return Density   

Pair Trading with ConAgra Foods and Dave

The main advantage of trading using opposite ConAgra Foods and Dave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConAgra Foods position performs unexpectedly, Dave 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 Dave will offset losses from the drop in Dave's long position.
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The idea behind ConAgra Foods and Dave 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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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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