Correlation Between United Guardian and Performance Food
Can any of the company-specific risk be diversified away by investing in both United Guardian 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 United Guardian and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Performance Food Group, you can compare the effects of market volatilities on United Guardian 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 United Guardian with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Performance Food.
Diversification Opportunities for United Guardian and Performance Food
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Performance is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and Performance Food go up and down completely randomly.
Pair Corralation between United Guardian and Performance Food
Allowing for the 90-day total investment horizon United Guardian is expected to generate 2.5 times less return on investment than Performance Food. In addition to that, United Guardian is 2.12 times more volatile than Performance Food Group. It trades about 0.01 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.06 per unit of volatility. If you would invest 6,026 in Performance Food Group on August 24, 2024 and sell it today you would earn a total of 2,733 from holding Performance Food Group or generate 45.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Performance Food Group
Performance |
| Timeline |
| United Guardian |
| Performance Food |
United Guardian and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Performance Food
The main advantage of trading using opposite United Guardian and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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