Correlation Between Performance Food and ALIOR BANK
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Performance Food Group vs. ALIOR BANK
Performance |
Timeline |
Performance Food |
ALIOR BANK |
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.Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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