Correlation Between Sysco and Performance Food
Can any of the company-specific risk be diversified away by investing in both Sysco and Performance Food 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 Sysco and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sysco and Performance Food Group, you can compare the effects of market volatilities on Sysco and Performance Food 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 Sysco with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sysco and Performance Food.
Diversification Opportunities for Sysco and Performance Food
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sysco and Performance is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sysco and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Sysco 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 Sysco are associated (or correlated) with Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Sysco i.e., Sysco and Performance Food go up and down completely randomly.
Pair Corralation between Sysco and Performance Food
Considering the 90-day investment horizon Sysco is expected to under-perform the Performance Food. But the stock apears to be less risky and, when comparing its historical volatility, Sysco is 1.03 times less risky than Performance Food. The stock trades about -0.02 of its potential returns per unit of risk. The Performance Food Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 8,086 in Performance Food Group on November 1, 2024 and sell it today you would earn a total of 1,062 from holding Performance Food Group or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sysco vs. Performance Food Group
Performance |
| Timeline |
| Sysco |
| Performance Food |
Sysco and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sysco and Performance Food
The main advantage of trading using opposite Sysco and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sysco position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| Sysco vs. Performance Food Group | Sysco vs. The Chefs Warehouse | Sysco vs. United Natural Foods | Sysco vs. Calavo Growers |
| Performance Food vs. Sysco | Performance Food vs. The Chefs Warehouse | Performance Food vs. United Natural Foods | Performance Food 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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