Correlation Between Performance Food and Pandora AS
Can any of the company-specific risk be diversified away by investing in both Performance Food and Pandora AS 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 Pandora AS 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 Pandora AS, you can compare the effects of market volatilities on Performance Food and Pandora AS 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 Pandora AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Pandora AS.
Diversification Opportunities for Performance Food and Pandora AS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and Pandora is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora AS 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 Pandora AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora AS has no effect on the direction of Performance Food i.e., Performance Food and Pandora AS go up and down completely randomly.
Pair Corralation between Performance Food and Pandora AS
Assuming the 90 days trading horizon Performance Food is expected to generate 1.94 times less return on investment than Pandora AS. But when comparing it to its historical volatility, Performance Food Group is 1.42 times less risky than Pandora AS. It trades about 0.14 of its potential returns per unit of risk. Pandora AS is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 14,260 in Pandora AS on October 14, 2024 and sell it today you would earn a total of 3,365 from holding Pandora AS or generate 23.6% 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. Pandora AS
Performance |
| Timeline |
| Performance Food |
| Pandora AS |
Performance Food and Pandora AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Pandora AS
The main advantage of trading using opposite Performance Food and Pandora AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Pandora AS 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 Pandora AS will offset losses from the drop in Pandora AS's long position.| Performance Food vs. PEPTONIC MEDICAL | Performance Food vs. MEDICAL FACILITIES NEW | Performance Food vs. GLOBUS MEDICAL A | Performance Food vs. ONWARD MEDICAL BV |
| Pandora AS vs. Performance Food Group | Pandora AS vs. RYU Apparel | Pandora AS vs. EBRO FOODS | Pandora AS vs. JAPAN TOBACCO UNSPADR12 |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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