Correlation Between Performance Food and AEGEAN AIRLINES

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

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

Diversification Opportunities for Performance Food and AEGEAN AIRLINES

-0.71

Correlation Coefficient

Performance Food  AEGEAN AIRLINES

Pay attention - limited upside

The 3 months correlation between Performance and AEGEAN is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Performance Food 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 Performance Food Group are associated (or correlated) with AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of Performance Food i.e., Performance Food and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between Performance Food and AEGEAN AIRLINES

Assuming the 90 days trading horizon Performance Food Group is expected to under-perform the AEGEAN AIRLINES. In addition to that, Performance Food is 1.01 times more volatile than AEGEAN AIRLINES. It trades about -0.05 of its total potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.35 per unit of volatility. If you would invest  928.00  in AEGEAN AIRLINES on September 22, 2024 and sell it today you would earn a total of  78.00  from holding AEGEAN AIRLINES or generate 8.41% return on investment over 90 days.

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

Performance Food Group  vs.  AEGEAN AIRLINES

Performance Food

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Performance Food unveiled solid returns over the last few months and may actually be approaching a breakup point.

AEGEAN AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEGEAN AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AEGEAN AIRLINES is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Performance Food and AEGEAN AIRLINES

The main advantage of trading using opposite Performance Food and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, AEGEAN AIRLINES 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 AEGEAN AIRLINES will offset losses from the drop in AEGEAN AIRLINES's long position.

The idea behind Performance Food Group and AEGEAN AIRLINES 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.