Correlation Between Performance Food and Takara Holdings
Can any of the company-specific risk be diversified away by investing in both Performance Food and Takara Holdings 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 Takara Holdings 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 Takara Holdings, you can compare the effects of market volatilities on Performance Food and Takara Holdings 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 Takara Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Takara Holdings.
Diversification Opportunities for Performance Food and Takara Holdings
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Performance and Takara is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Takara Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takara Holdings 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 Takara Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takara Holdings has no effect on the direction of Performance Food i.e., Performance Food and Takara Holdings go up and down completely randomly.
Pair Corralation between Performance Food and Takara Holdings
Assuming the 90 days horizon Performance Food Group is expected to generate 1.18 times more return on investment than Takara Holdings. However, Performance Food is 1.18 times more volatile than Takara Holdings. It trades about 0.21 of its potential returns per unit of risk. Takara Holdings is currently generating about 0.1 per unit of risk. If you would invest 6,600 in Performance Food Group on September 3, 2024 and sell it today you would earn a total of 1,650 from holding Performance Food Group or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. Takara Holdings
Performance |
| Timeline |
| Performance Food |
| Takara Holdings |
Performance Food and Takara Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Takara Holdings
The main advantage of trading using opposite Performance Food and Takara Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Takara Holdings 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 Takara Holdings will offset losses from the drop in Takara Holdings' long position.| Performance Food vs. Australian Agricultural | Performance Food vs. Sumitomo Mitsui Construction | Performance Food vs. Iridium Communications | Performance Food vs. Entravision Communications |
| Takara Holdings vs. Aedas Homes SA | Takara Holdings vs. American Homes 4 | Takara Holdings vs. Addus HomeCare | Takara Holdings vs. Siamgas And Petrochemicals |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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