Correlation Between PREMIER FOODS and Performance Food
Can any of the company-specific risk be diversified away by investing in both PREMIER 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 PREMIER 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 PREMIER FOODS and Performance Food Group, you can compare the effects of market volatilities on PREMIER 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 PREMIER FOODS with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of PREMIER FOODS and Performance Food.
Diversification Opportunities for PREMIER FOODS and Performance Food
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PREMIER and Performance is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PREMIER 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 PREMIER 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 PREMIER 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 PREMIER FOODS i.e., PREMIER FOODS and Performance Food go up and down completely randomly.
Pair Corralation between PREMIER FOODS and Performance Food
Assuming the 90 days trading horizon PREMIER FOODS is expected to generate 1.09 times more return on investment than Performance Food. However, PREMIER FOODS is 1.09 times more volatile than Performance Food Group. It trades about -0.06 of its potential returns per unit of risk. Performance Food Group is currently generating about -0.3 per unit of risk. If you would invest 226.00 in PREMIER FOODS on October 8, 2024 and sell it today you would lose (2.00) from holding PREMIER FOODS or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PREMIER FOODS vs. Performance Food Group
Performance |
| Timeline |
| PREMIER FOODS |
| Performance Food |
PREMIER FOODS and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PREMIER FOODS and Performance Food
The main advantage of trading using opposite PREMIER FOODS and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PREMIER 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.| PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc |
| Performance Food vs. Entravision Communications | Performance Food vs. Agilent Technologies | Performance Food vs. BioNTech SE | Performance Food vs. Easy Software AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |