Correlation Between Japan Asia and Performance Food

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

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

Diversification Opportunities for Japan Asia and Performance Food

-0.92

Correlation Coefficient

Japan Asia  Performance Food

Pay attention - limited upside

The 3 months correlation between Japan and Performance is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and Performance Food go up and down completely randomly.

Pair Corralation between Japan Asia and Performance Food

Assuming the 90 days horizon Japan Asia Investment is expected to generate 1.71 times more return on investment than Performance Food. However, Japan Asia is 1.71 times more volatile than Performance Food Group. It trades about 0.18 of its potential returns per unit of risk. Performance Food Group is currently generating about -0.14 per unit of risk. If you would invest  122.00  in Japan Asia Investment on December 23, 2024 and sell it today you would earn a total of  40.00  from holding Japan Asia Investment or generate 32.79% return on investment over 90 days.

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

Japan Asia Investment  vs.  Performance Food Group

Japan Asia Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Japan Asia Investment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Japan Asia reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile 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 Japan Asia and Performance Food

The main advantage of trading using opposite Japan Asia and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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 Japan Asia Investment 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.