Correlation Between Performance Food and W P

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

Diversification Opportunities for Performance Food and W P

-0.2

Correlation Coefficient

Performance Food  W P

Good diversification

The 3 months correlation between Performance and WPY is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and W P Carey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W P Carey 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 W P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W P Carey has no effect on the direction of Performance Food i.e., Performance Food and W P go up and down completely randomly.

Pair Corralation between Performance Food and W P

Assuming the 90 days trading horizon Performance Food Group is expected to under-perform the W P. In addition to that, Performance Food is 1.07 times more volatile than W P Carey. It trades about -0.28 of its total potential returns per unit of risk. W P Carey is currently generating about 0.13 per unit of volatility. If you would invest  5,194  in W P Carey on October 12, 2024 and sell it today you would earn a total of  114.00  from holding W P Carey or generate 2.19% return on investment over 90 days.

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

Performance Food Group  vs.  W P Carey

Performance Food

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Performance Food may actually be approaching a critical reversion point that can send shares even higher in February 2025.

W P Carey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days W P Carey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, W P is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Performance Food and W P

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

The idea behind Performance Food Group and W P Carey 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.