Correlation Between NISSIN FOODS and Performance Food

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

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

Diversification Opportunities for NISSIN FOODS and Performance Food

-0.01

Correlation Coefficient

NISSIN FOODS  Performance Food

Good diversification

The 3 months correlation between NISSIN and Performance is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and NISSIN FOODS 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 NISSIN FOODS HLDGS 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 NISSIN FOODS i.e., NISSIN FOODS and Performance Food go up and down completely randomly.

Pair Corralation between NISSIN FOODS and Performance Food

Assuming the 90 days trading horizon NISSIN FOODS HLDGS is expected to under-perform the Performance Food. In addition to that, NISSIN FOODS is 1.04 times more volatile than Performance Food Group. It trades about -0.03 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.06 per unit of volatility. If you would invest  5,350  in Performance Food Group on November 20, 2024 and sell it today you would earn a total of  2,900  from holding Performance Food Group or generate 54.21% return on investment over 90 days.

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

NISSIN FOODS HLDGS  vs.  Performance Food Group

NISSIN FOODS HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NISSIN FOODS HLDGS 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 rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Performance Food

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Performance Food is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with NISSIN FOODS and Performance Food

The main advantage of trading using opposite NISSIN FOODS and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSIN FOODS 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 NISSIN FOODS HLDGS 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.