Correlation Between PPHE HOTEL and Performance Food
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL 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 PPHE HOTEL and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE HOTEL GROUP and Performance Food Group, you can compare the effects of market volatilities on PPHE HOTEL 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 PPHE HOTEL with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Performance Food.
Diversification Opportunities for PPHE HOTEL and Performance Food
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PPHE and Performance is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and PPHE HOTEL 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 PPHE HOTEL GROUP 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 PPHE HOTEL i.e., PPHE HOTEL and Performance Food go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Performance Food
Assuming the 90 days trading horizon PPHE HOTEL is expected to generate 9.65 times less return on investment than Performance Food. In addition to that, PPHE HOTEL is 1.12 times more volatile than Performance Food Group. It trades about 0.02 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.22 per unit of volatility. If you would invest 5,950 in Performance Food Group on November 4, 2024 and sell it today you would earn a total of 2,700 from holding Performance Food Group or generate 45.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Performance Food Group
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Performance Food |
PPHE HOTEL and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Performance Food
The main advantage of trading using opposite PPHE HOTEL and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL 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.| PPHE HOTEL vs. Haier Smart Home | PPHE HOTEL vs. OFFICE DEPOT | PPHE HOTEL vs. GREENX METALS LTD | PPHE HOTEL vs. De Grey Mining |
| Performance Food vs. BioNTech SE | Performance Food vs. GLG LIFE TECH | Performance Food vs. SOFI TECHNOLOGIES | Performance Food vs. CHRYSALIS INVESTMENTS LTD |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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