Correlation Between Performance Food and Sysco
Can any of the company-specific risk be diversified away by investing in both Performance Food and Sysco 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 Sysco 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 Sysco, you can compare the effects of market volatilities on Performance Food and Sysco 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 Sysco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Sysco.
Diversification Opportunities for Performance Food and Sysco
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and Sysco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco 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 Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of Performance Food i.e., Performance Food and Sysco go up and down completely randomly.
Pair Corralation between Performance Food and Sysco
Assuming the 90 days horizon Performance Food Group is expected to generate 1.83 times more return on investment than Sysco. However, Performance Food is 1.83 times more volatile than Sysco. It trades about 0.24 of its potential returns per unit of risk. Sysco is currently generating about 0.21 per unit of risk. If you would invest 7,300 in Performance Food Group on September 1, 2024 and sell it today you would earn a total of 950.00 from holding Performance Food Group or generate 13.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Performance Food Group vs. Sysco
Performance |
| Timeline |
| Performance Food |
| Sysco |
Performance Food and Sysco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Sysco
The main advantage of trading using opposite Performance Food and Sysco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Sysco 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 Sysco will offset losses from the drop in Sysco's long position.| Performance Food vs. Sysco | Performance Food vs. Jernimo Martins SGPS | Performance Food vs. US Foods Holding | Performance Food vs. Metro AG |
| Sysco vs. Jernimo Martins SGPS | Sysco vs. Performance Food Group | Sysco vs. US Foods Holding | Sysco vs. Metro AG |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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