Correlation Between Performance Food and ALIOR BANK

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Can any of the company-specific risk be diversified away by investing in both Performance Food and ALIOR BANK 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 ALIOR BANK 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 ALIOR BANK, you can compare the effects of market volatilities on Performance Food and ALIOR BANK 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 ALIOR BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and ALIOR BANK.

Diversification Opportunities for Performance Food and ALIOR BANK

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Performance and ALIOR is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and ALIOR BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIOR BANK 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 ALIOR BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIOR BANK has no effect on the direction of Performance Food i.e., Performance Food and ALIOR BANK go up and down completely randomly.

Pair Corralation between Performance Food and ALIOR BANK

Assuming the 90 days trading horizon Performance Food Group is expected to under-perform the ALIOR BANK. But the stock apears to be less risky and, when comparing its historical volatility, Performance Food Group is 1.48 times less risky than ALIOR BANK. The stock trades about -0.14 of its potential returns per unit of risk. The ALIOR BANK is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,059  in ALIOR BANK on September 25, 2024 and sell it today you would lose (50.00) from holding ALIOR BANK or give up 2.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Performance Food Group  vs.  ALIOR BANK

 Performance 
       Timeline  
Performance Food 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
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.
ALIOR BANK 

Risk-Adjusted Performance

0 of 100

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

Performance Food and ALIOR BANK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Performance Food and ALIOR BANK

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

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