Correlation Between FLJ Old and Performance Food

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

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

Diversification Opportunities for FLJ Old and Performance Food

0.0

Correlation Coefficient

FLJ Old  Performance Food

Pay attention - limited upside

The 3 months correlation between FLJ and Performance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FLJ Old and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and FLJ Old 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 FLJ Old 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 FLJ Old i.e., FLJ Old and Performance Food go up and down completely randomly.

Pair Corralation between FLJ Old and Performance Food

If you would invest (100.00) in FLJ Old on December 29, 2024 and sell it today you would earn a total of  100.00  from holding FLJ Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FLJ Old  vs.  Performance Food Group

FLJ Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days FLJ Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady essential indicators, FLJ Old is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

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 latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with FLJ Old and Performance Food

The main advantage of trading using opposite FLJ Old and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLJ Old 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 FLJ Old 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.