Correlation Between Performance Food and MTY Food
Can any of the company-specific risk be diversified away by investing in both Performance Food and MTY Food 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 MTY Food 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 MTY Food Group, you can compare the effects of market volatilities on Performance Food and MTY Food 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 MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and MTY Food.
Diversification Opportunities for Performance Food and MTY Food
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and MTY is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and MTY Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTY Food Group 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 MTY Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTY Food Group has no effect on the direction of Performance Food i.e., Performance Food and MTY Food go up and down completely randomly.
Pair Corralation between Performance Food and MTY Food
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.79 times more return on investment than MTY Food. However, Performance Food Group is 1.27 times less risky than MTY Food. It trades about -0.2 of its potential returns per unit of risk. MTY Food Group is currently generating about -0.24 per unit of risk. If you would invest 8,450 in Performance Food Group on October 12, 2024 and sell it today you would lose (300.00) from holding Performance Food Group or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. MTY Food Group
Performance |
| Timeline |
| Performance Food |
| MTY Food Group |
Performance Food and MTY Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and MTY Food
The main advantage of trading using opposite Performance Food and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, MTY Food 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 MTY Food will offset losses from the drop in MTY Food's long position.| Performance Food vs. YOOMA WELLNESS INC | Performance Food vs. FEMALE HEALTH | Performance Food vs. Applied Materials | Performance Food vs. US Physical Therapy |
| MTY Food vs. Superior Plus Corp | MTY Food vs. NMI Holdings | MTY Food vs. SIVERS SEMICONDUCTORS AB | MTY Food vs. Talanx AG |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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