Correlation Between Performance Food and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both Performance Food and Brockhaus Capital 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 Brockhaus Capital 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 Brockhaus Capital Management, you can compare the effects of market volatilities on Performance Food and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Brockhaus Capital.
Diversification Opportunities for Performance Food and Brockhaus Capital
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Performance and Brockhaus is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of Performance Food i.e., Performance Food and Brockhaus Capital go up and down completely randomly.
Pair Corralation between Performance Food and Brockhaus Capital
Assuming the 90 days trading horizon Performance Food Group is expected to under-perform the Brockhaus Capital. But the stock apears to be less risky and, when comparing its historical volatility, Performance Food Group is 2.91 times less risky than Brockhaus Capital. The stock trades about -0.2 of its potential returns per unit of risk. The Brockhaus Capital Management is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,250 in Brockhaus Capital Management on October 11, 2024 and sell it today you would earn a total of 20.00 from holding Brockhaus Capital Management or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. Brockhaus Capital Management
Performance |
| Timeline |
| Performance Food |
| Brockhaus Capital |
Performance Food and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Brockhaus Capital
The main advantage of trading using opposite Performance Food and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.| Performance Food vs. SEI INVESTMENTS | Performance Food vs. JLF INVESTMENT | Performance Food vs. Japan Asia Investment | Performance Food vs. New Residential Investment |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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