Correlation Between Performance Food and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Performance Food and UNITED RENTALS 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 UNITED RENTALS 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 UNITED RENTALS, you can compare the effects of market volatilities on Performance Food and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and UNITED RENTALS.
Diversification Opportunities for Performance Food and UNITED RENTALS
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Performance and UNITED is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of Performance Food i.e., Performance Food and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Performance Food and UNITED RENTALS
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.71 times more return on investment than UNITED RENTALS. However, Performance Food Group is 1.42 times less risky than UNITED RENTALS. It trades about 0.08 of its potential returns per unit of risk. UNITED RENTALS is currently generating about 0.05 per unit of risk. If you would invest 6,650 in Performance Food Group on November 3, 2024 and sell it today you would earn a total of 2,000 from holding Performance Food Group or generate 30.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. UNITED RENTALS
Performance |
| Timeline |
| Performance Food |
| UNITED RENTALS |
Performance Food and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and UNITED RENTALS
The main advantage of trading using opposite Performance Food and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS's long position.| Performance Food vs. BioNTech SE | Performance Food vs. GLG LIFE TECH | Performance Food vs. SOFI TECHNOLOGIES | Performance Food vs. CHRYSALIS INVESTMENTS LTD |
| UNITED RENTALS vs. Aedas Homes SA | UNITED RENTALS vs. Aristocrat Leisure Limited | UNITED RENTALS vs. Haier Smart Home | UNITED RENTALS vs. CENTURIA OFFICE REIT |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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