Correlation Between Performance Food and RELO GROUP
Can any of the company-specific risk be diversified away by investing in both Performance Food and RELO GROUP 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 RELO GROUP 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 RELO GROUP INC, you can compare the effects of market volatilities on Performance Food and RELO GROUP 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 RELO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and RELO GROUP.
Diversification Opportunities for Performance Food and RELO GROUP
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Performance and RELO is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and RELO GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RELO GROUP INC 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 RELO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RELO GROUP INC has no effect on the direction of Performance Food i.e., Performance Food and RELO GROUP go up and down completely randomly.
Pair Corralation between Performance Food and RELO GROUP
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.66 times more return on investment than RELO GROUP. However, Performance Food Group is 1.51 times less risky than RELO GROUP. It trades about 0.06 of its potential returns per unit of risk. RELO GROUP INC is currently generating about 0.0 per unit of risk. If you would invest 5,600 in Performance Food Group on September 14, 2024 and sell it today you would earn a total of 2,850 from holding Performance Food Group or generate 50.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Performance Food Group vs. RELO GROUP INC
Performance |
| Timeline |
| Performance Food |
| RELO GROUP INC |
Performance Food and RELO GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and RELO GROUP
The main advantage of trading using opposite Performance Food and RELO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, RELO GROUP 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 RELO GROUP will offset losses from the drop in RELO GROUP's long position.| Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc |
| RELO GROUP vs. GAMESTOP | RELO GROUP vs. Tyson Foods | RELO GROUP vs. Performance Food Group | RELO GROUP vs. National Beverage Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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