Correlation Between Apple and Performance Food
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Performance Food Group, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Performance Food.
Diversification Opportunities for Apple and Performance Food
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Apple and Performance is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Apple 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 Apple Inc 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 Apple i.e., Apple and Performance Food go up and down completely randomly.
Pair Corralation between Apple and Performance Food
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Performance Food. In addition to that, Apple is 2.11 times more volatile than Performance Food Group. It trades about -0.1 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.23 per unit of volatility. If you would invest 8,000 in Performance Food Group on November 8, 2024 and sell it today you would earn a total of 400.00 from holding Performance Food Group or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Apple Inc vs. Performance Food Group
Performance |
| Timeline |
| Apple Inc |
| Performance Food |
Apple and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Performance Food
The main advantage of trading using opposite Apple and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Ultra Clean Holdings | Apple vs. MARKET VECTR RETAIL | Apple vs. CANON MARKETING JP | Apple vs. ScanSource |
| Performance Food vs. Gol Intelligent Airlines | Performance Food vs. GungHo Online Entertainment | Performance Food vs. Aegean Airlines SA | Performance Food vs. YATRA ONLINE DL 0001 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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