Correlation Between EBRO FOODS and Performance Food
Can any of the company-specific risk be diversified away by investing in both EBRO FOODS 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 EBRO FOODS and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBRO FOODS and Performance Food Group, you can compare the effects of market volatilities on EBRO FOODS 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 EBRO FOODS with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and Performance Food.
Diversification Opportunities for EBRO FOODS and Performance Food
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EBRO and Performance is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and EBRO FOODS 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 EBRO FOODS 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 EBRO FOODS i.e., EBRO FOODS and Performance Food go up and down completely randomly.
Pair Corralation between EBRO FOODS and Performance Food
Assuming the 90 days trading horizon EBRO FOODS is expected to under-perform the Performance Food. But the stock apears to be less risky and, when comparing its historical volatility, EBRO FOODS is 1.71 times less risky than Performance Food. The stock trades about 0.0 of its potential returns per unit of risk. The Performance Food Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,350 in Performance Food Group on October 14, 2024 and sell it today you would earn a total of 850.00 from holding Performance Food Group or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBRO FOODS vs. Performance Food Group
Performance |
| Timeline |
| EBRO FOODS |
| Performance Food |
EBRO FOODS and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBRO FOODS and Performance Food
The main advantage of trading using opposite EBRO FOODS and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBRO FOODS 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.| EBRO FOODS vs. GungHo Online Entertainment | EBRO FOODS vs. Austevoll Seafood ASA | EBRO FOODS vs. Cal Maine Foods | EBRO FOODS vs. Lifeway Foods |
| Performance Food vs. PEPTONIC MEDICAL | Performance Food vs. MEDICAL FACILITIES NEW | Performance Food vs. GLOBUS MEDICAL A | Performance Food vs. ONWARD MEDICAL BV |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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