Correlation Between Performance Food and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both Performance Food and NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES, you can compare the effects of market volatilities on Performance Food and NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and NOVAGOLD RESOURCES.
Diversification Opportunities for Performance Food and NOVAGOLD RESOURCES
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Performance and NOVAGOLD is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVAGOLD RESOURCES has no effect on the direction of Performance Food i.e., Performance Food and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between Performance Food and NOVAGOLD RESOURCES
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.52 times more return on investment than NOVAGOLD RESOURCES. However, Performance Food Group is 1.93 times less risky than NOVAGOLD RESOURCES. It trades about 0.12 of its potential returns per unit of risk. NOVAGOLD RESOURCES is currently generating about 0.0 per unit of risk. If you would invest 6,250 in Performance Food Group on September 26, 2024 and sell it today you would earn a total of 1,800 from holding Performance Food Group or generate 28.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| Performance Food |
| NOVAGOLD RESOURCES |
Performance Food and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and NOVAGOLD RESOURCES
The main advantage of trading using opposite Performance Food and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES will offset losses from the drop in NOVAGOLD RESOURCES's long position.| Performance Food vs. DeVry Education Group | Performance Food vs. ELECTRONIC ARTS | Performance Food vs. STRAYER EDUCATION | Performance Food vs. AOI Electronics Co |
| NOVAGOLD RESOURCES vs. AAC TECHNOLOGHLDGADR | NOVAGOLD RESOURCES vs. Performance Food Group | NOVAGOLD RESOURCES vs. National Beverage Corp | NOVAGOLD RESOURCES vs. CN MODERN DAIRY |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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