Correlation Between Performance Food and Information Services
Can any of the company-specific risk be diversified away by investing in both Performance Food and Information Services 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 Information Services 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 Information Services, you can compare the effects of market volatilities on Performance Food and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Information Services.
Diversification Opportunities for Performance Food and Information Services
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Performance and Information is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Performance Food i.e., Performance Food and Information Services go up and down completely randomly.
Pair Corralation between Performance Food and Information Services
Given the investment horizon of 90 days Performance Food Group is expected to generate 1.52 times more return on investment than Information Services. However, Performance Food is 1.52 times more volatile than Information Services. It trades about 0.33 of its potential returns per unit of risk. Information Services is currently generating about 0.24 per unit of risk. If you would invest 8,414 in Performance Food Group on October 24, 2024 and sell it today you would earn a total of 498.00 from holding Performance Food Group or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Performance Food Group vs. Information Services
Performance |
| Timeline |
| Performance Food |
| Information Services |
Performance Food and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Information Services
The main advantage of trading using opposite Performance Food and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.| Performance Food vs. Sysco | Performance Food vs. The Chefs Warehouse | Performance Food vs. United Natural Foods | Performance Food vs. Calavo Growers |
| Information Services vs. WK Kellogg Co | Information Services vs. Vital Farms | Information Services vs. Oasis Hotel Resort | Information Services vs. Performance Food Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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