Correlation Between MPH Health and US Foods
Can any of the company-specific risk be diversified away by investing in both MPH Health and US 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 MPH Health and US Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPH Health Care and US Foods Holding, you can compare the effects of market volatilities on MPH Health and US 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 MPH Health with a short position of US Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPH Health and US Foods.
Diversification Opportunities for MPH Health and US Foods
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MPH and UFH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MPH Health Care and US Foods Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Foods Holding and MPH Health 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 MPH Health Care are associated (or correlated) with US Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Foods Holding has no effect on the direction of MPH Health i.e., MPH Health and US Foods go up and down completely randomly.
Pair Corralation between MPH Health and US Foods
Assuming the 90 days trading horizon MPH Health Care is expected to under-perform the US Foods. In addition to that, MPH Health is 1.44 times more volatile than US Foods Holding. It trades about -0.06 of its total potential returns per unit of risk. US Foods Holding is currently generating about -0.05 per unit of volatility. If you would invest 6,600 in US Foods Holding on October 17, 2024 and sell it today you would lose (100.00) from holding US Foods Holding or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MPH Health Care vs. US Foods Holding
Performance |
| Timeline |
| MPH Health Care |
| US Foods Holding |
MPH Health and US Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPH Health and US Foods
The main advantage of trading using opposite MPH Health and US Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPH Health position performs unexpectedly, US 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 US Foods will offset losses from the drop in US Foods' long position.| MPH Health vs. DIVERSIFIED ROYALTY | MPH Health vs. SEI INVESTMENTS | MPH Health vs. JLF INVESTMENT | MPH Health vs. ECHO INVESTMENT ZY |
| US Foods vs. Tyson Foods | US Foods vs. WESANA HEALTH HOLD | US Foods vs. Siemens Healthineers AG | US Foods vs. MPH Health Care |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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