Correlation Between Mission Produce and Performance Food
Can any of the company-specific risk be diversified away by investing in both Mission Produce 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 Mission Produce and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mission Produce and Performance Food Group, you can compare the effects of market volatilities on Mission Produce 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 Mission Produce with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mission Produce and Performance Food.
Diversification Opportunities for Mission Produce and Performance Food
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mission and Performance is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mission Produce and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Mission Produce 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 Mission Produce 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 Mission Produce i.e., Mission Produce and Performance Food go up and down completely randomly.
Pair Corralation between Mission Produce and Performance Food
Considering the 90-day investment horizon Mission Produce is expected to generate 3.03 times less return on investment than Performance Food. In addition to that, Mission Produce is 1.55 times more volatile than Performance Food Group. It trades about 0.01 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 5,997 in Performance Food Group on October 20, 2024 and sell it today you would earn a total of 2,776 from holding Performance Food Group or generate 46.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mission Produce vs. Performance Food Group
Performance |
| Timeline |
| Mission Produce |
| Performance Food |
Mission Produce and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mission Produce and Performance Food
The main advantage of trading using opposite Mission Produce and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mission Produce 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.| Mission Produce vs. The Chefs Warehouse | Mission Produce vs. The Andersons | Mission Produce vs. AMCON Distributing | Mission Produce vs. Performance Food Group |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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