Correlation Between Food Life and US FOODS
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
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 Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 5.88% |
Values | Daily Returns |
Food Life Companies vs. US FOODS HOLDING
Performance |
Timeline |
Food Life Companies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
US FOODS HOLDING |
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.Food Life vs. Laureate Education | Food Life vs. CAREER EDUCATION | Food Life vs. Xinhua Winshare Publishing | Food Life vs. USWE SPORTS AB |
US FOODS vs. Minerals Technologies | US FOODS vs. Akamai Technologies | US FOODS vs. STMICROELECTRONICS | US FOODS vs. SOFI TECHNOLOGIES |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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