Correlation Between ANT and US Foods

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

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

Diversification Opportunities for ANT and US Foods

0.26

Correlation Coefficient

ANT  US Foods

Modest diversification

The 3 months correlation between ANT and UFH is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ANT 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 ANT 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 ANT 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 ANT i.e., ANT and US Foods go up and down completely randomly.

Pair Corralation between ANT and US Foods

Assuming the 90 days trading horizon ANT is expected to generate 10.53 times more return on investment than US Foods. However, ANT is 10.53 times more volatile than US Foods Holding. It trades about 0.06 of its potential returns per unit of risk. US Foods Holding is currently generating about -0.07 per unit of risk. If you would invest  147.00  in ANT on December 19, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

ANT  vs.  US Foods Holding

ANT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

US Foods Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Foods Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, US Foods is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ANT and US Foods

The main advantage of trading using opposite ANT and US Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT 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' long position.

The idea behind ANT 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.