Correlation Between State Bank and US FOODS
Can any of the company-specific risk be diversified away by investing in both State Bank 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 State Bank and US FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and US FOODS HOLDING, you can compare the effects of market volatilities on State Bank 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 State Bank with a short position of US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and US FOODS.
Diversification Opportunities for State Bank and US FOODS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between State and UFH is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of 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 State Bank 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 State Bank of 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 State Bank i.e., State Bank and US FOODS go up and down completely randomly.
Pair Corralation between State Bank and US FOODS
Assuming the 90 days horizon State Bank is expected to generate 1.55 times less return on investment than US FOODS. In addition to that, State Bank is 1.25 times more volatile than US FOODS HOLDING. It trades about 0.07 of its total potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.14 per unit of volatility. If you would invest 3,620 in US FOODS HOLDING on September 3, 2024 and sell it today you would earn a total of 2,980 from holding US FOODS HOLDING or generate 82.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. US FOODS HOLDING
Performance |
| Timeline |
| State Bank |
| US FOODS HOLDING |
State Bank and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and US FOODS
The main advantage of trading using opposite State Bank and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank 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.| State Bank vs. Evolution Mining Limited | State Bank vs. MTI WIRELESS EDGE | State Bank vs. GALENA MINING LTD | State Bank vs. MCEWEN MINING INC |
| US FOODS vs. SWISS WATER DECAFFCOFFEE | US FOODS vs. 24SEVENOFFICE GROUP AB | US FOODS vs. VARIOUS EATERIES LS | US FOODS vs. KB HOME |
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.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |