Correlation Between Performance Food and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both Performance Food and Franco Nevada 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 Franco Nevada 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 Franco Nevada, you can compare the effects of market volatilities on Performance Food and Franco Nevada 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 Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Franco Nevada.
Diversification Opportunities for Performance Food and Franco Nevada
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Performance and Franco is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada 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 Franco Nevada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franco Nevada has no effect on the direction of Performance Food i.e., Performance Food and Franco Nevada go up and down completely randomly.
Pair Corralation between Performance Food and Franco Nevada
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.9 times more return on investment than Franco Nevada. However, Performance Food Group is 1.11 times less risky than Franco Nevada. It trades about 0.06 of its potential returns per unit of risk. Franco Nevada is currently generating about 0.0 per unit of risk. If you would invest 5,450 in Performance Food Group on October 9, 2024 and sell it today you would earn a total of 2,700 from holding Performance Food Group or generate 49.54% 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. Franco Nevada
Performance |
| Timeline |
| Performance Food |
| Franco Nevada |
Performance Food and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Franco Nevada
The main advantage of trading using opposite Performance Food and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Franco Nevada 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 Franco Nevada will offset losses from the drop in Franco Nevada's long position.| Performance Food vs. Entravision Communications | Performance Food vs. Agilent Technologies | Performance Food vs. BioNTech SE | Performance Food vs. Easy Software AG |
| Franco Nevada vs. Applied Materials | Franco Nevada vs. The Yokohama Rubber | Franco Nevada vs. CARSALESCOM | Franco Nevada vs. CarsalesCom |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |