Correlation Between Calavo Growers and US Foods
Can any of the company-specific risk be diversified away by investing in both Calavo Growers and US Foods 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 Calavo Growers and US Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calavo Growers and US Foods Holding, you can compare the effects of market volatilities on Calavo Growers and US Foods 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 Calavo Growers with a short position of US Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calavo Growers and US Foods.
Diversification Opportunities for Calavo Growers and US Foods
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calavo and USFD is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Calavo Growers and US Foods Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Foods Holding and Calavo Growers 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 Calavo Growers are associated (or correlated) with US Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Foods Holding has no effect on the direction of Calavo Growers i.e., Calavo Growers and US Foods go up and down completely randomly.
Pair Corralation between Calavo Growers and US Foods
Given the investment horizon of 90 days Calavo Growers is expected to generate 3.51 times less return on investment than US Foods. In addition to that, Calavo Growers is 1.17 times more volatile than US Foods Holding. It trades about 0.12 of its total potential returns per unit of risk. US Foods Holding is currently generating about 0.48 per unit of volatility. If you would invest 6,100 in US Foods Holding on August 27, 2024 and sell it today you would earn a total of 889.00 from holding US Foods Holding or generate 14.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calavo Growers vs. US Foods Holding
Performance |
| Timeline |
| Calavo Growers |
| US Foods Holding |
Calavo Growers and US Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calavo Growers and US Foods
The main advantage of trading using opposite Calavo Growers and US Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calavo Growers position performs unexpectedly, US Foods 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 US Foods will offset losses from the drop in US Foods' long position.| Calavo Growers vs. SpartanNash Co | Calavo Growers vs. The Andersons | Calavo Growers vs. The Chefs Warehouse | Calavo Growers vs. Hf Foods Group |
| US Foods vs. The Chefs Warehouse | US Foods vs. Sysco | US Foods vs. SpartanNash Co | US Foods 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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