Correlation Between Gelsenwasser and Performance Food
Can any of the company-specific risk be diversified away by investing in both Gelsenwasser 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 Gelsenwasser and Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gelsenwasser AG and Performance Food Group, you can compare the effects of market volatilities on Gelsenwasser 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 Gelsenwasser with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gelsenwasser and Performance Food.
Diversification Opportunities for Gelsenwasser and Performance Food
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gelsenwasser and Performance is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gelsenwasser AG and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Gelsenwasser 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 Gelsenwasser AG 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 Gelsenwasser i.e., Gelsenwasser and Performance Food go up and down completely randomly.
Pair Corralation between Gelsenwasser and Performance Food
Assuming the 90 days horizon Gelsenwasser AG is expected to under-perform the Performance Food. In addition to that, Gelsenwasser is 1.95 times more volatile than Performance Food Group. It trades about -0.02 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 5,650 in Performance Food Group on September 4, 2024 and sell it today you would earn a total of 2,800 from holding Performance Food Group or generate 49.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gelsenwasser AG vs. Performance Food Group
Performance |
| Timeline |
| Gelsenwasser AG |
| Performance Food |
Gelsenwasser and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gelsenwasser and Performance Food
The main advantage of trading using opposite Gelsenwasser and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gelsenwasser 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.| Gelsenwasser vs. Bumrungrad Hospital Public | Gelsenwasser vs. CVS Health | Gelsenwasser vs. Brockhaus Capital Management | Gelsenwasser vs. ANTA SPORTS PRODUCT |
| Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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