Correlation Between Sendas Distribuidora and Performance Food
Can any of the company-specific risk be diversified away by investing in both Sendas Distribuidora 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 Sendas Distribuidora and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sendas Distribuidora SA and Performance Food Group, you can compare the effects of market volatilities on Sendas Distribuidora 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 Sendas Distribuidora with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendas Distribuidora and Performance Food.
Diversification Opportunities for Sendas Distribuidora and Performance Food
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sendas and Performance is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Sendas Distribuidora 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 Sendas Distribuidora SA 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 Sendas Distribuidora i.e., Sendas Distribuidora and Performance Food go up and down completely randomly.
Pair Corralation between Sendas Distribuidora and Performance Food
Given the investment horizon of 90 days Sendas Distribuidora SA is expected to under-perform the Performance Food. In addition to that, Sendas Distribuidora is 1.93 times more volatile than Performance Food Group. It trades about -0.06 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.06 per unit of volatility. If you would invest 6,026 in Performance Food Group on August 24, 2024 and sell it today you would earn a total of 2,733 from holding Performance Food Group or generate 45.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sendas Distribuidora SA vs. Performance Food Group
Performance |
| Timeline |
| Sendas Distribuidora |
| Performance Food |
Sendas Distribuidora and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sendas Distribuidora and Performance Food
The main advantage of trading using opposite Sendas Distribuidora and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sendas Distribuidora 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.| Sendas Distribuidora vs. Natural Grocers by | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Ocado Group plc | Sendas Distribuidora vs. Weis Markets |
| Performance Food vs. Sysco | Performance Food vs. The Chefs Warehouse | Performance Food vs. United Natural Foods | Performance Food vs. Calavo Growers |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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