Correlation Between GREENLIGHT CAP and US FOODS
Can any of the company-specific risk be diversified away by investing in both GREENLIGHT CAP 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 GREENLIGHT CAP and US FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENLIGHT CAP RE and US FOODS HOLDING, you can compare the effects of market volatilities on GREENLIGHT CAP 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 GREENLIGHT CAP with a short position of US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENLIGHT CAP and US FOODS.
Diversification Opportunities for GREENLIGHT CAP and US FOODS
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GREENLIGHT and UFH is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GREENLIGHT CAP RE 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 GREENLIGHT CAP 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 GREENLIGHT CAP RE 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 GREENLIGHT CAP i.e., GREENLIGHT CAP and US FOODS go up and down completely randomly.
Pair Corralation between GREENLIGHT CAP and US FOODS
Assuming the 90 days trading horizon GREENLIGHT CAP is expected to generate 1.59 times less return on investment than US FOODS. In addition to that, GREENLIGHT CAP is 1.2 times more volatile than US FOODS HOLDING. It trades about 0.05 of its total potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.09 per unit of volatility. If you would invest 3,720 in US FOODS HOLDING on November 8, 2024 and sell it today you would earn a total of 3,230 from holding US FOODS HOLDING or generate 86.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENLIGHT CAP RE vs. US FOODS HOLDING
Performance |
| Timeline |
| GREENLIGHT CAP RE |
| US FOODS HOLDING |
GREENLIGHT CAP and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENLIGHT CAP and US FOODS
The main advantage of trading using opposite GREENLIGHT CAP and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENLIGHT CAP 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's long position.| GREENLIGHT CAP vs. American Eagle Outfitters | GREENLIGHT CAP vs. PSI Software AG | GREENLIGHT CAP vs. RYU Apparel | GREENLIGHT CAP vs. RCS MediaGroup SpA |
| US FOODS vs. PennantPark Investment | US FOODS vs. NTG Nordic Transport | US FOODS vs. Chuangs China Investments | US FOODS vs. Gaztransport Technigaz SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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