Correlation Between Food Life and US FOODS

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Can any of the company-specific risk be diversified away by investing in both Food Life and US FOODS 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 Food Life and US FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and US FOODS HOLDING, you can compare the effects of market volatilities on Food Life and US FOODS 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 Food Life with a short position of US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and US FOODS.

Diversification Opportunities for Food Life and US FOODS

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Food and UFH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING and Food Life 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 Food Life Companies are associated (or correlated) with US FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of Food Life i.e., Food Life and US FOODS go up and down completely randomly.

Pair Corralation between Food Life and US FOODS

If you would invest  0.00  in Food Life Companies on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Food Life Companies or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy5.88%
ValuesDaily Returns

Food Life Companies  vs.  US FOODS HOLDING

 Performance 
       Timeline  
Food Life Companies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Food Life Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Food Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
US FOODS HOLDING 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in US FOODS HOLDING are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, US FOODS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Food Life and US FOODS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Food Life and US FOODS

The main advantage of trading using opposite Food Life and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life position performs unexpectedly, US FOODS 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 US FOODS will offset losses from the drop in US FOODS's long position.
The idea behind Food Life Companies and US FOODS HOLDING pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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