Correlation Between Performance Food and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both Performance Food and CITY OFFICE 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 CITY OFFICE 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 CITY OFFICE REIT, you can compare the effects of market volatilities on Performance Food and CITY OFFICE 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 CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and CITY OFFICE.
Diversification Opportunities for Performance Food and CITY OFFICE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Performance and CITY is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and CITY OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITY OFFICE REIT 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 CITY OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITY OFFICE REIT has no effect on the direction of Performance Food i.e., Performance Food and CITY OFFICE go up and down completely randomly.
Pair Corralation between Performance Food and CITY OFFICE
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.46 times more return on investment than CITY OFFICE. However, Performance Food Group is 2.19 times less risky than CITY OFFICE. It trades about 0.08 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about -0.08 per unit of risk. If you would invest 8,250 in Performance Food Group on October 30, 2024 and sell it today you would earn a total of 250.00 from holding Performance Food Group or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. CITY OFFICE REIT
Performance |
| Timeline |
| Performance Food |
| CITY OFFICE REIT |
Performance Food and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and CITY OFFICE
The main advantage of trading using opposite Performance Food and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, CITY OFFICE 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 CITY OFFICE will offset losses from the drop in CITY OFFICE's long position.| Performance Food vs. Titan Machinery | Performance Food vs. Hitachi Construction Machinery | Performance Food vs. Tokyu Construction Co | Performance Food vs. CAIRN HOMES EO |
| CITY OFFICE vs. SPORT LISBOA E | CITY OFFICE vs. Air Transport Services | CITY OFFICE vs. BioNTech SE | CITY OFFICE vs. GAZTRTECHNIUADR15EO01 |
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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