Correlation Between Performance Food and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Performance Food and MeVis Medical 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 MeVis Medical 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 MeVis Medical Solutions, you can compare the effects of market volatilities on Performance Food and MeVis Medical 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 MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and MeVis Medical.
Diversification Opportunities for Performance Food and MeVis Medical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and MeVis is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Performance Food i.e., Performance Food and MeVis Medical go up and down completely randomly.
Pair Corralation between Performance Food and MeVis Medical
Assuming the 90 days trading horizon Performance Food Group is expected to generate 1.87 times more return on investment than MeVis Medical. However, Performance Food is 1.87 times more volatile than MeVis Medical Solutions. It trades about 0.3 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about 0.0 per unit of risk. If you would invest 7,450 in Performance Food Group on September 2, 2024 and sell it today you would earn a total of 800.00 from holding Performance Food Group or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. MeVis Medical Solutions
Performance |
| Timeline |
| Performance Food |
| MeVis Medical Solutions |
Performance Food and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and MeVis Medical
The main advantage of trading using opposite Performance Food and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, MeVis Medical 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc |
| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |