Correlation Between Performance Food and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Performance Food and Siemens Healthineers 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 Siemens Healthineers 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 Siemens Healthineers AG, you can compare the effects of market volatilities on Performance Food and Siemens Healthineers 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 Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Siemens Healthineers.
Diversification Opportunities for Performance Food and Siemens Healthineers
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Performance and Siemens is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers 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 Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Performance Food i.e., Performance Food and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Performance Food and Siemens Healthineers
Assuming the 90 days trading horizon Performance Food Group is expected to generate 1.04 times more return on investment than Siemens Healthineers. However, Performance Food is 1.04 times more volatile than Siemens Healthineers AG. It trades about 0.06 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.02 per unit of risk. If you would invest 5,400 in Performance Food Group on October 14, 2024 and sell it today you would earn a total of 2,800 from holding Performance Food Group or generate 51.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. Siemens Healthineers AG
Performance |
| Timeline |
| Performance Food |
| Siemens Healthineers |
Performance Food and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Siemens Healthineers
The main advantage of trading using opposite Performance Food and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Siemens Healthineers 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 Siemens Healthineers will offset losses from the drop in Siemens Healthineers' long position.| Performance Food vs. PEPTONIC MEDICAL | Performance Food vs. MEDICAL FACILITIES NEW | Performance Food vs. GLOBUS MEDICAL A | Performance Food vs. ONWARD MEDICAL BV |
| Siemens Healthineers vs. Thai Beverage Public | Siemens Healthineers vs. Performance Food Group | Siemens Healthineers vs. United Natural Foods | Siemens Healthineers vs. TYSON FOODS A |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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