Correlation Between Highlight Communications and Performance Food
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Performance Food Group, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Performance Food.
Diversification Opportunities for Highlight Communications and Performance Food
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highlight and Performance is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and Performance Food go up and down completely randomly.
Pair Corralation between Highlight Communications and Performance Food
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the Performance Food. In addition to that, Highlight Communications is 2.37 times more volatile than Performance Food Group. It trades about -0.04 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.09 per unit of volatility. If you would invest 6,150 in Performance Food Group on November 5, 2024 and sell it today you would earn a total of 2,500 from holding Performance Food Group or generate 40.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. Performance Food Group
Performance |
| Timeline |
| Highlight Communications |
| Performance Food |
Highlight Communications and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Performance Food
The main advantage of trading using opposite Highlight Communications and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. SPARTAN STORES | Highlight Communications vs. H2O Retailing | Highlight Communications vs. UNIVMUSIC GRPADR050 | Highlight Communications vs. URBAN OUTFITTERS |
| Performance Food vs. SOGECLAIR SA INH | Performance Food vs. Corporate Office Properties | Performance Food vs. NORWEGIAN AIR SHUT | Performance Food vs. DELTA AIR LINES |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |