Correlation Between Natural Grocers and Performance Food
Can any of the company-specific risk be diversified away by investing in both Natural Grocers 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 Natural Grocers and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Grocers by and Performance Food Group, you can compare the effects of market volatilities on Natural Grocers 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 Natural Grocers with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Grocers and Performance Food.
Diversification Opportunities for Natural Grocers and Performance Food
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Natural and Performance is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Natural Grocers by and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Natural Grocers 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 Natural Grocers by 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 Natural Grocers i.e., Natural Grocers and Performance Food go up and down completely randomly.
Pair Corralation between Natural Grocers and Performance Food
Given the investment horizon of 90 days Natural Grocers by is expected to generate 3.09 times more return on investment than Performance Food. However, Natural Grocers is 3.09 times more volatile than Performance Food Group. It trades about 0.24 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 2,571 in Natural Grocers by on August 28, 2024 and sell it today you would earn a total of 2,127 from holding Natural Grocers by or generate 82.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Grocers by vs. Performance Food Group
Performance |
| Timeline |
| Natural Grocers by |
| Performance Food |
Natural Grocers and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Grocers and Performance Food
The main advantage of trading using opposite Natural Grocers and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Grocers 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.| Natural Grocers vs. Innovative Food Hldg | Natural Grocers vs. Calavo Growers | Natural Grocers vs. The Chefs Warehouse | Natural Grocers vs. AMCON Distributing |
| Performance Food vs. Sysco | Performance Food vs. The Chefs Warehouse | Performance Food vs. United Natural Foods | Performance Food vs. Calavo Growers |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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