Correlation Between Andersons and Chefs Warehouse

Can any of the company-specific risk be diversified away by investing in both Andersons and Chefs Warehouse 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 Andersons and Chefs Warehouse into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Andersons and The Chefs Warehouse, you can compare the effects of market volatilities on Andersons and Chefs Warehouse 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 Andersons with a short position of Chefs Warehouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andersons and Chefs Warehouse.

Diversification Opportunities for Andersons and Chefs Warehouse

0.24

Correlation Coefficient

Andersons  Chefs Warehouse

Modest diversification

The 3 months correlation between Andersons and Chefs is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Andersons and The Chefs Warehouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chefs Warehouse and Andersons 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 The Andersons are associated (or correlated) with Chefs Warehouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chefs Warehouse has no effect on the direction of Andersons i.e., Andersons and Chefs Warehouse go up and down completely randomly.

Pair Corralation between Andersons and Chefs Warehouse

Given the investment horizon of 90 days The Andersons is expected to generate 1.23 times more return on investment than Chefs Warehouse. However, Andersons is 1.23 times more volatile than The Chefs Warehouse. It trades about 0.06 of its potential returns per unit of risk. The Chefs Warehouse is currently generating about 0.07 per unit of risk. If you would invest  3,961  in The Andersons on December 29, 2024 and sell it today you would earn a total of  365.00  from holding The Andersons or generate 9.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

The Andersons  vs.  The Chefs Warehouse

Andersons

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Andersons are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, Andersons may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Chefs Warehouse

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Chefs Warehouse are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Chefs Warehouse may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Andersons and Chefs Warehouse

The main advantage of trading using opposite Andersons and Chefs Warehouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andersons position performs unexpectedly, Chefs Warehouse 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 Chefs Warehouse will offset losses from the drop in Chefs Warehouse's long position.

The idea behind The Andersons and The Chefs Warehouse 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 CEOs Directory module to screen CEOs from public companies around the world.