Correlation Between TRAINLINE PLC and Performance Food
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and Performance Food 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 TRAINLINE PLC and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and Performance Food Group, you can compare the effects of market volatilities on TRAINLINE PLC and Performance Food 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 TRAINLINE PLC with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Performance Food.
Diversification Opportunities for TRAINLINE PLC and Performance Food
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TRAINLINE and Performance is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and Performance Food go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and Performance Food
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 1.74 times more return on investment than Performance Food. However, TRAINLINE PLC is 1.74 times more volatile than Performance Food Group. It trades about 0.04 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.06 per unit of risk. If you would invest 342.00 in TRAINLINE PLC LS on October 13, 2024 and sell it today you would earn a total of 124.00 from holding TRAINLINE PLC LS or generate 36.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
TRAINLINE PLC LS vs. Performance Food Group
Performance |
| Timeline |
| TRAINLINE PLC LS |
| Performance Food |
TRAINLINE PLC and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAINLINE PLC and Performance Food
The main advantage of trading using opposite TRAINLINE PLC and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| TRAINLINE PLC vs. Guangdong Investment Limited | TRAINLINE PLC vs. Apollo Investment Corp | TRAINLINE PLC vs. NXP Semiconductors NV | TRAINLINE PLC vs. MEDCAW INVESTMENTS LS 01 |
| Performance Food vs. TIANDE CHEMICAL | Performance Food vs. TRAINLINE PLC LS | Performance Food vs. CHEMICAL INDUSTRIES | Performance Food vs. Broadcom |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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