Correlation Between Vita Coco and ConAgra Foods

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

Diversification Opportunities for Vita Coco and ConAgra Foods

  Correlation Coefficient

Significant diversification

The 3 months correlation between Vita and ConAgra is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods and Vita Coco 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 Vita Coco 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 Vita Coco i.e., Vita Coco and ConAgra Foods go up and down completely randomly.

Pair Corralation between Vita Coco and ConAgra Foods

Given the investment horizon of 90 days Vita Coco is expected to generate 2.83 times more return on investment than ConAgra Foods. However, Vita Coco is 2.83 times more volatile than ConAgra Foods. It trades about 0.2 of its potential returns per unit of risk. ConAgra Foods is currently generating about -0.03 per unit of risk. If you would invest  1,299  in Vita Coco on March 6, 2023 and sell it today you would earn a total of  1,356  from holding Vita Coco or generate 104.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Vita Coco  vs.  ConAgra Foods

 Performance (%) 
Vita Coco 

Vita Performance

17 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Vita Coco are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Vita Coco displayed solid returns over the last few months and may actually be approaching a breakup point.
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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Vita Coco and ConAgra Foods Volatility Contrast

   Predicted Return Density   

Pair Trading with Vita Coco and ConAgra Foods

The main advantage of trading using opposite Vita Coco and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco 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 Vita Coco 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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