Correlation Between Jacquet Metal and Performance Food

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

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

Diversification Opportunities for Jacquet Metal and Performance Food

0.38

Correlation Coefficient

Jacquet Metal  Performance Food

Weak diversification

The 3 months correlation between Jacquet and Performance is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Jacquet Metal 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 Jacquet Metal Service 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 Jacquet Metal i.e., Jacquet Metal and Performance Food go up and down completely randomly.

Pair Corralation between Jacquet Metal and Performance Food

Assuming the 90 days horizon Jacquet Metal is expected to generate 1.28 times less return on investment than Performance Food. In addition to that, Jacquet Metal is 1.12 times more volatile than Performance Food Group. It trades about 0.17 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.25 per unit of volatility. If you would invest  6,750  in Performance Food Group on September 16, 2024 and sell it today you would earn a total of  1,600  from holding Performance Food Group or generate 23.7% return on investment over 90 days.

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

Jacquet Metal Service  vs.  Performance Food Group

Jacquet Metal Service

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jacquet Metal reported solid returns over the last few months and may actually be approaching a breakup point.

Performance Food

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Performance Food unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jacquet Metal and Performance Food

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

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.