Correlation Between Performance Food and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both Performance Food and ZhongAn Online 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 ZhongAn Online 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 ZhongAn Online P, you can compare the effects of market volatilities on Performance Food and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and ZhongAn Online.
Diversification Opportunities for Performance Food and ZhongAn Online
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Performance and ZhongAn is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Performance Food i.e., Performance Food and ZhongAn Online go up and down completely randomly.
Pair Corralation between Performance Food and ZhongAn Online
Assuming the 90 days trading horizon Performance Food is expected to generate 1.37 times less return on investment than ZhongAn Online. But when comparing it to its historical volatility, Performance Food Group is 2.17 times less risky than ZhongAn Online. It trades about 0.32 of its potential returns per unit of risk. ZhongAn Online P is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 134.00 in ZhongAn Online P on November 6, 2024 and sell it today you would earn a total of 11.00 from holding ZhongAn Online P or generate 8.21% 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. ZhongAn Online P
Performance |
| Timeline |
| Performance Food |
| ZhongAn Online P |
Performance Food and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and ZhongAn Online
The main advantage of trading using opposite Performance Food and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| Performance Food vs. Tencent Music Entertainment | Performance Food vs. INTERNET INJPADR 1 | Performance Food vs. ecotel communication ag | Performance Food vs. TELECOM ITALRISP ADR10 |
| ZhongAn Online vs. CLOVER HEALTH INV | ZhongAn Online vs. PURE FOODS TASMANIA | ZhongAn Online vs. PLANT VEDA FOODS | ZhongAn Online vs. Planet Fitness |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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