Correlation Between GLOBUS MEDICAL and Performance Food
Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL 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 GLOBUS MEDICAL and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLOBUS MEDICAL A and Performance Food Group, you can compare the effects of market volatilities on GLOBUS MEDICAL 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 GLOBUS MEDICAL with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL and Performance Food.
Diversification Opportunities for GLOBUS MEDICAL and Performance Food
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GLOBUS and Performance is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and GLOBUS MEDICAL 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 GLOBUS MEDICAL A 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 GLOBUS MEDICAL i.e., GLOBUS MEDICAL and Performance Food go up and down completely randomly.
Pair Corralation between GLOBUS MEDICAL and Performance Food
Assuming the 90 days trading horizon GLOBUS MEDICAL A is expected to generate 2.14 times more return on investment than Performance Food. However, GLOBUS MEDICAL is 2.14 times more volatile than Performance Food Group. It trades about 0.32 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.2 per unit of risk. If you would invest 7,950 in GLOBUS MEDICAL A on October 29, 2024 and sell it today you would earn a total of 850.00 from holding GLOBUS MEDICAL A or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLOBUS MEDICAL A vs. Performance Food Group
Performance |
| Timeline |
| GLOBUS MEDICAL A |
| Performance Food |
GLOBUS MEDICAL and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLOBUS MEDICAL and Performance Food
The main advantage of trading using opposite GLOBUS MEDICAL and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS MEDICAL 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.| GLOBUS MEDICAL vs. PKSHA TECHNOLOGY INC | GLOBUS MEDICAL vs. Cognizant Technology Solutions | GLOBUS MEDICAL vs. Firan Technology Group | GLOBUS MEDICAL vs. DXC Technology Co |
| Performance Food vs. ADRIATIC METALS LS 013355 | Performance Food vs. Firan Technology Group | Performance Food vs. DAIDO METAL TD | Performance Food vs. PARKEN Sport Entertainment |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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