Correlation Between Pilgrims Pride and Smithfield Foods,
Can any of the company-specific risk be diversified away by investing in both Pilgrims Pride and Smithfield 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 Pilgrims Pride and Smithfield Foods, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pilgrims Pride Corp and Smithfield Foods, Common, you can compare the effects of market volatilities on Pilgrims Pride and Smithfield 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 Pilgrims Pride with a short position of Smithfield Foods,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pilgrims Pride and Smithfield Foods,.
Diversification Opportunities for Pilgrims Pride and Smithfield Foods,
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pilgrims and Smithfield is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Pilgrims Pride Corp and Smithfield Foods, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smithfield Foods, Common and Pilgrims Pride 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 Pilgrims Pride Corp are associated (or correlated) with Smithfield Foods,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smithfield Foods, Common has no effect on the direction of Pilgrims Pride i.e., Pilgrims Pride and Smithfield Foods, go up and down completely randomly.
Pair Corralation between Pilgrims Pride and Smithfield Foods,
Considering the 90-day investment horizon Pilgrims Pride Corp is expected to under-perform the Smithfield Foods,. But the stock apears to be less risky and, when comparing its historical volatility, Pilgrims Pride Corp is 1.13 times less risky than Smithfield Foods,. The stock trades about -0.2 of its potential returns per unit of risk. The Smithfield Foods, Common is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 2,496 in Smithfield Foods, Common on August 2, 2025 and sell it today you would lose (280.00) from holding Smithfield Foods, Common or give up 11.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pilgrims Pride Corp vs. Smithfield Foods, Common
Performance |
| Timeline |
| Pilgrims Pride Corp |
| Smithfield Foods, Common |
Pilgrims Pride and Smithfield Foods, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pilgrims Pride and Smithfield Foods,
The main advantage of trading using opposite Pilgrims Pride and Smithfield Foods, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pilgrims Pride position performs unexpectedly, Smithfield 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 Smithfield Foods, will offset losses from the drop in Smithfield Foods,'s long position.| Pilgrims Pride vs. ConAgra Foods | Pilgrims Pride vs. Campbells Co | Pilgrims Pride vs. Lamb Weston Holdings | Pilgrims Pride vs. Ingredion Incorporated |
| Smithfield Foods, vs. ConAgra Foods | Smithfield Foods, vs. Pilgrims Pride Corp | Smithfield Foods, vs. Campbells Co | Smithfield Foods, vs. Ingredion Incorporated |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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