Correlation Between US Foods and Life On
Can any of the company-specific risk be diversified away by investing in both US Foods and Life On 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 Life On 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 Life On Earth, you can compare the effects of market volatilities on US Foods and Life On 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 Life On. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Foods and Life On.
Diversification Opportunities for US Foods and Life On
Excellent diversification
The 3 months correlation between USFD and Life is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding US Foods Holding and Life On Earth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life On Earth 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 Life On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life On Earth has no effect on the direction of US Foods i.e., US Foods and Life On go up and down completely randomly.
Pair Corralation between US Foods and Life On
If you would invest 6,144 in US Foods Holding on September 2, 2024 and sell it today you would earn a total of 833.00 from holding US Foods Holding or generate 13.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
US Foods Holding vs. Life On Earth
Performance |
| Timeline |
| US Foods Holding |
| Life On Earth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
US Foods and Life On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Foods and Life On
The main advantage of trading using opposite US Foods and Life On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Foods position performs unexpectedly, Life On 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 Life On will offset losses from the drop in Life On's long position.| US Foods vs. The Chefs Warehouse | US Foods vs. Sysco | US Foods vs. SpartanNash Co | US Foods vs. Calavo Growers |
| Life On vs. Colabor Group | Life On vs. Bunzl plc | Life On vs. Innovative Food Hldg | Life On 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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