Correlation Between Performance Food and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Performance Food and AMCON Distributing 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 AMCON Distributing 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 AMCON Distributing, you can compare the effects of market volatilities on Performance Food and AMCON Distributing 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 AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and AMCON Distributing.
Diversification Opportunities for Performance Food and AMCON Distributing
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Performance and AMCON is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Performance Food i.e., Performance Food and AMCON Distributing go up and down completely randomly.
Pair Corralation between Performance Food and AMCON Distributing
Given the investment horizon of 90 days Performance Food Group is expected to generate 0.46 times more return on investment than AMCON Distributing. However, Performance Food Group is 2.17 times less risky than AMCON Distributing. It trades about 0.06 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.0 per unit of risk. If you would invest 5,997 in Performance Food Group on October 20, 2024 and sell it today you would earn a total of 2,776 from holding Performance Food Group or generate 46.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
Performance Food Group vs. AMCON Distributing
Performance |
| Timeline |
| Performance Food |
| AMCON Distributing |
Performance Food and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and AMCON Distributing
The main advantage of trading using opposite Performance Food and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing's long position.| Performance Food vs. Sysco | Performance Food vs. The Chefs Warehouse | Performance Food vs. United Natural Foods | Performance Food vs. Calavo Growers |
| AMCON Distributing vs. The Chefs Warehouse | AMCON Distributing vs. G Willi Food International | AMCON Distributing vs. SpartanNash Co | AMCON Distributing vs. Calavo Growers |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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