Correlation Between Performance Food and Associated British
Can any of the company-specific risk be diversified away by investing in both Performance Food and Associated British 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 Associated British 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 Associated British Foods, you can compare the effects of market volatilities on Performance Food and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Associated British.
Diversification Opportunities for Performance Food and Associated British
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Performance and Associated is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of Performance Food i.e., Performance Food and Associated British go up and down completely randomly.
Pair Corralation between Performance Food and Associated British
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.83 times more return on investment than Associated British. However, Performance Food Group is 1.21 times less risky than Associated British. It trades about -0.14 of its potential returns per unit of risk. Associated British Foods is currently generating about -0.21 per unit of risk. If you would invest 8,350 in Performance Food Group on September 24, 2024 and sell it today you would lose (250.00) from holding Performance Food Group or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Performance Food Group vs. Associated British Foods
Performance |
| Timeline |
| Performance Food |
| Associated British Foods |
Performance Food and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Associated British
The main advantage of trading using opposite Performance Food and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc |
| Associated British vs. United Rentals | Associated British vs. ALBIS LEASING AG | Associated British vs. ON SEMICONDUCTOR | Associated British vs. Tower Semiconductor |
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.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |