Correlation Between PF Bakkafrost and Performance Food
Can any of the company-specific risk be diversified away by investing in both PF Bakkafrost 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 PF Bakkafrost and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PF Bakkafrost and Performance Food Group, you can compare the effects of market volatilities on PF Bakkafrost 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 PF Bakkafrost with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of PF Bakkafrost and Performance Food.
Diversification Opportunities for PF Bakkafrost and Performance Food
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 6BF and Performance is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding PF Bakkafrost and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and PF Bakkafrost 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 PF Bakkafrost 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 PF Bakkafrost i.e., PF Bakkafrost and Performance Food go up and down completely randomly.
Pair Corralation between PF Bakkafrost and Performance Food
Assuming the 90 days horizon PF Bakkafrost is expected to generate 1.57 times more return on investment than Performance Food. However, PF Bakkafrost is 1.57 times more volatile than Performance Food Group. It trades about 0.06 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.09 per unit of risk. If you would invest 4,418 in PF Bakkafrost on September 3, 2024 and sell it today you would earn a total of 1,157 from holding PF Bakkafrost or generate 26.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PF Bakkafrost vs. Performance Food Group
Performance |
| Timeline |
| PF Bakkafrost |
| Performance Food |
PF Bakkafrost and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PF Bakkafrost and Performance Food
The main advantage of trading using opposite PF Bakkafrost and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PF Bakkafrost 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.| PF Bakkafrost vs. Performance Food Group | PF Bakkafrost vs. Superior Plus Corp | PF Bakkafrost vs. NMI Holdings | PF Bakkafrost vs. Origin Agritech |
| Performance Food vs. Australian Agricultural | Performance Food vs. Sumitomo Mitsui Construction | Performance Food vs. Iridium Communications | Performance Food vs. Entravision Communications |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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