Correlation Between Performance Food and Jerónimo Martins
Can any of the company-specific risk be diversified away by investing in both Performance Food and Jerónimo Martins 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 Performance Food and Jerónimo Martins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Food Group and Jernimo Martins SGPS, you can compare the effects of market volatilities on Performance Food and Jerónimo Martins 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 Performance Food with a short position of Jerónimo Martins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Jerónimo Martins.
Diversification Opportunities for Performance Food and Jerónimo Martins
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and Jerónimo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Jernimo Martins SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jernimo Martins SGPS and Performance Food 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 Performance Food Group are associated (or correlated) with Jerónimo Martins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jernimo Martins SGPS has no effect on the direction of Performance Food i.e., Performance Food and Jerónimo Martins go up and down completely randomly.
Pair Corralation between Performance Food and Jerónimo Martins
Assuming the 90 days horizon Performance Food Group is expected to generate 0.79 times more return on investment than Jerónimo Martins. However, Performance Food Group is 1.27 times less risky than Jerónimo Martins. It trades about 0.16 of its potential returns per unit of risk. Jernimo Martins SGPS is currently generating about 0.04 per unit of risk. If you would invest 7,850 in Performance Food Group on October 19, 2024 and sell it today you would earn a total of 600.00 from holding Performance Food Group or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. Jernimo Martins SGPS
Performance |
| Timeline |
| Performance Food |
| Jernimo Martins SGPS |
Performance Food and Jerónimo Martins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Jerónimo Martins
The main advantage of trading using opposite Performance Food and Jerónimo Martins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Jerónimo Martins 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 Jerónimo Martins will offset losses from the drop in Jerónimo Martins' long position.| Performance Food vs. Sysco | Performance Food vs. Jernimo Martins SGPS | Performance Food vs. Bunzl plc | Performance Food vs. JERONIMO MARTINS UNADR2 |
| Jerónimo Martins vs. Sysco | Jerónimo Martins vs. Bunzl plc | Jerónimo Martins vs. JERONIMO MARTINS UNADR2 | Jerónimo Martins vs. Performance Food Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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