Correlation Between Forsys Metals and Performance Food

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

By analyzing existing cross correlation between Forsys Metals Corp and Performance Food Group, you can compare the effects of market volatilities on Forsys Metals 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 Forsys Metals with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forsys Metals and Performance Food.

Diversification Opportunities for Forsys Metals and Performance Food

0.49

Correlation Coefficient

Forsys Metals  Performance Food

Very weak diversification

The 3 months correlation between Forsys and Performance is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Forsys Metals Corp and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Forsys Metals 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 Forsys Metals Corp 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 Forsys Metals i.e., Forsys Metals and Performance Food go up and down completely randomly.

Pair Corralation between Forsys Metals and Performance Food

Assuming the 90 days horizon Forsys Metals Corp is expected to generate 4.51 times more return on investment than Performance Food. However, Forsys Metals is 4.51 times more volatile than Performance Food Group. It trades about 0.02 of its potential returns per unit of risk. Performance Food Group is currently generating about -0.16 per unit of risk. If you would invest  36.00  in Forsys Metals Corp on December 25, 2024 and sell it today you would lose (2.00) from holding Forsys Metals Corp or give up 5.56% of portfolio value over 90 days.

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

Forsys Metals Corp  vs.  Performance Food Group

Forsys Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Forsys Metals Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Forsys Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Performance Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Performance Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Forsys Metals and Performance Food

The main advantage of trading using opposite Forsys Metals and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forsys Metals 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.

The idea behind Forsys Metals Corp and Performance Food Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.