Correlation Between Performance Food and Pacific Ventures
Can any of the company-specific risk be diversified away by investing in both Performance Food and Pacific Ventures 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 Pacific Ventures 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 Pacific Ventures Group, you can compare the effects of market volatilities on Performance Food and Pacific Ventures 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 Pacific Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Pacific Ventures.
Diversification Opportunities for Performance Food and Pacific Ventures
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Performance and Pacific is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Pacific Ventures Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Ventures 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 Pacific Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Ventures has no effect on the direction of Performance Food i.e., Performance Food and Pacific Ventures go up and down completely randomly.
Pair Corralation between Performance Food and Pacific Ventures
Given the investment horizon of 90 days Performance Food is expected to generate 400.65 times less return on investment than Pacific Ventures. But when comparing it to its historical volatility, Performance Food Group is 127.08 times less risky than Pacific Ventures. It trades about 0.06 of its potential returns per unit of risk. Pacific Ventures Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Pacific Ventures Group on September 3, 2024 and sell it today you would lose (49.87) from holding Pacific Ventures Group or give up 99.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.13% |
| Values | Daily Returns |
Performance Food Group vs. Pacific Ventures Group
Performance |
| Timeline |
| Performance Food |
| Pacific Ventures |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Performance Food and Pacific Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Pacific Ventures
The main advantage of trading using opposite Performance Food and Pacific Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Pacific Ventures 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 Pacific Ventures will offset losses from the drop in Pacific Ventures' long position.| Performance Food vs. Sysco | Performance Food vs. The Chefs Warehouse | Performance Food vs. United Natural Foods | Performance Food vs. Calavo Growers |
| Pacific Ventures vs. AMCON Distributing | Pacific Ventures vs. Colabor Group | Pacific Ventures vs. Bunzl plc | Pacific Ventures vs. Wanderport Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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