Correlation Between PULSION Medical and US FOODS
Can any of the company-specific risk be diversified away by investing in both PULSION Medical and US FOODS 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 PULSION Medical and US FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PULSION Medical Systems and US FOODS HOLDING, you can compare the effects of market volatilities on PULSION Medical and US FOODS 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 PULSION Medical with a short position of US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PULSION Medical and US FOODS.
Diversification Opportunities for PULSION Medical and US FOODS
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PULSION and UFH is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PULSION Medical Systems and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING and PULSION Medical 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 PULSION Medical Systems are associated (or correlated) with US FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of PULSION Medical i.e., PULSION Medical and US FOODS go up and down completely randomly.
Pair Corralation between PULSION Medical and US FOODS
Assuming the 90 days trading horizon PULSION Medical is expected to generate 1.27 times less return on investment than US FOODS. But when comparing it to its historical volatility, PULSION Medical Systems is 3.48 times less risky than US FOODS. It trades about 0.33 of its potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,500 in US FOODS HOLDING on October 25, 2024 and sell it today you would earn a total of 150.00 from holding US FOODS HOLDING or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PULSION Medical Systems vs. US FOODS HOLDING
Performance |
| Timeline |
| PULSION Medical Systems |
| US FOODS HOLDING |
PULSION Medical and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PULSION Medical and US FOODS
The main advantage of trading using opposite PULSION Medical and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PULSION Medical position performs unexpectedly, US FOODS 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 US FOODS will offset losses from the drop in US FOODS's long position.| PULSION Medical vs. PT Bank Mandiri | PULSION Medical vs. BANK MANDIRI | PULSION Medical vs. BANK MANDIRI | PULSION Medical vs. BANK MANDIRI |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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