Correlation Between SP Global and Performance Food
Can any of the company-specific risk be diversified away by investing in both SP Global 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 SP Global and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and Performance Food Group, you can compare the effects of market volatilities on SP Global 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 SP Global with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and Performance Food.
Diversification Opportunities for SP Global and Performance Food
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MHL and Performance is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and SP Global 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 SP Global 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 SP Global i.e., SP Global and Performance Food go up and down completely randomly.
Pair Corralation between SP Global and Performance Food
Assuming the 90 days horizon SP Global is expected to generate 1.27 times more return on investment than Performance Food. However, SP Global is 1.27 times more volatile than Performance Food Group. It trades about 0.28 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.23 per unit of risk. If you would invest 47,780 in SP Global on November 8, 2024 and sell it today you would earn a total of 3,340 from holding SP Global or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
SP Global vs. Performance Food Group
Performance |
| Timeline |
| SP Global |
| Performance Food |
SP Global and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and Performance Food
The main advantage of trading using opposite SP Global and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global 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.| SP Global vs. Algonquin Power Utilities | SP Global vs. CN DATANG C | SP Global vs. Canadian Utilities Limited | SP Global vs. DATATEC LTD 2 |
| Performance Food vs. Gol Intelligent Airlines | Performance Food vs. GungHo Online Entertainment | Performance Food vs. Aegean Airlines SA | Performance Food vs. YATRA ONLINE DL 0001 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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