Correlation Between US FOODS and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both US FOODS and PARKEN Sport 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 US FOODS and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US FOODS HOLDING and PARKEN Sport Entertainment, you can compare the effects of market volatilities on US FOODS and PARKEN Sport 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 US FOODS with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of US FOODS and PARKEN Sport.
Diversification Opportunities for US FOODS and PARKEN Sport
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UFH and PARKEN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding US FOODS HOLDING and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta and US FOODS 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 US FOODS HOLDING are associated (or correlated) with PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of US FOODS i.e., US FOODS and PARKEN Sport go up and down completely randomly.
Pair Corralation between US FOODS and PARKEN Sport
Assuming the 90 days trading horizon US FOODS HOLDING is expected to generate 1.15 times more return on investment than PARKEN Sport. However, US FOODS is 1.15 times more volatile than PARKEN Sport Entertainment. It trades about 0.47 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about -0.01 per unit of risk. If you would invest 5,650 in US FOODS HOLDING on September 1, 2024 and sell it today you would earn a total of 1,050 from holding US FOODS HOLDING or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US FOODS HOLDING vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| US FOODS HOLDING |
| PARKEN Sport Enterta |
US FOODS and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US FOODS and PARKEN Sport
The main advantage of trading using opposite US FOODS and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US FOODS position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| US FOODS vs. OAKTRSPECLENDNEW | US FOODS vs. Regions Financial | US FOODS vs. Cardinal Health | US FOODS vs. Bausch Health Companies |
| PARKEN Sport vs. Netflix | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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