Correlation Between US Foods and Mission Produce
Can any of the company-specific risk be diversified away by investing in both US Foods and Mission Produce 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 Mission Produce 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 Mission Produce, you can compare the effects of market volatilities on US Foods and Mission Produce 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 Mission Produce. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Foods and Mission Produce.
Diversification Opportunities for US Foods and Mission Produce
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between USFD and Mission is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding US Foods Holding and Mission Produce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mission Produce 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 Mission Produce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mission Produce has no effect on the direction of US Foods i.e., US Foods and Mission Produce go up and down completely randomly.
Pair Corralation between US Foods and Mission Produce
Given the investment horizon of 90 days US Foods Holding is expected to generate 0.61 times more return on investment than Mission Produce. However, US Foods Holding is 1.65 times less risky than Mission Produce. It trades about 0.11 of its potential returns per unit of risk. Mission Produce is currently generating about 0.02 per unit of risk. If you would invest 3,610 in US Foods Holding on November 1, 2024 and sell it today you would earn a total of 3,562 from holding US Foods Holding or generate 98.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Foods Holding vs. Mission Produce
Performance |
| Timeline |
| US Foods Holding |
| Mission Produce |
US Foods and Mission Produce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Foods and Mission Produce
The main advantage of trading using opposite US Foods and Mission Produce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Foods position performs unexpectedly, Mission Produce 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 Mission Produce will offset losses from the drop in Mission Produce's long position.| US Foods vs. The Chefs Warehouse | US Foods vs. Sysco | US Foods vs. SpartanNash Co | US Foods vs. Calavo Growers |
| Mission Produce vs. The Chefs Warehouse | Mission Produce vs. The Andersons | Mission Produce vs. AMCON Distributing | Mission Produce vs. Performance Food Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| 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 |