Correlation Between CAIRN HOMES and Performance Food
Can any of the company-specific risk be diversified away by investing in both CAIRN HOMES 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 CAIRN HOMES and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIRN HOMES EO and Performance Food Group, you can compare the effects of market volatilities on CAIRN HOMES 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 CAIRN HOMES with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIRN HOMES and Performance Food.
Diversification Opportunities for CAIRN HOMES and Performance Food
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAIRN and Performance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CAIRN HOMES EO and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and CAIRN HOMES 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 CAIRN HOMES EO 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 CAIRN HOMES i.e., CAIRN HOMES and Performance Food go up and down completely randomly.
Pair Corralation between CAIRN HOMES and Performance Food
Assuming the 90 days horizon CAIRN HOMES EO is expected to under-perform the Performance Food. In addition to that, CAIRN HOMES is 2.71 times more volatile than Performance Food Group. It trades about -0.15 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.34 per unit of volatility. If you would invest 8,100 in Performance Food Group on October 31, 2024 and sell it today you would earn a total of 500.00 from holding Performance Food Group or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAIRN HOMES EO vs. Performance Food Group
Performance |
| Timeline |
| CAIRN HOMES EO |
| Performance Food |
CAIRN HOMES and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAIRN HOMES and Performance Food
The main advantage of trading using opposite CAIRN HOMES and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIRN HOMES 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.| CAIRN HOMES vs. FRACTAL GAMING GROUP | CAIRN HOMES vs. Sun Life Financial | CAIRN HOMES vs. CHIBA BANK | CAIRN HOMES vs. Games Workshop Group |
| Performance Food vs. International Consolidated Airlines | Performance Food vs. Gaming and Leisure | Performance Food vs. CITY OFFICE REIT | Performance Food vs. China Eastern Airlines |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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