Correlation Between Performance Food and Metalla Royalty

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

Diversification Opportunities for Performance Food and Metalla Royalty

0.1

Correlation Coefficient

Performance Food  Metalla Royalty

Average diversification

The 3 months correlation between Performance and Metalla is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Metalla Royalty Streaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalla Royalty Streaming 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 Metalla Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalla Royalty Streaming has no effect on the direction of Performance Food i.e., Performance Food and Metalla Royalty go up and down completely randomly.

Pair Corralation between Performance Food and Metalla Royalty

Assuming the 90 days trading horizon Performance Food Group is expected to under-perform the Metalla Royalty. But the stock apears to be less risky and, when comparing its historical volatility, Performance Food Group is 1.87 times less risky than Metalla Royalty. The stock trades about -0.16 of its potential returns per unit of risk. The Metalla Royalty Streaming is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  249.00  in Metalla Royalty Streaming on December 24, 2024 and sell it today you would earn a total of  30.00  from holding Metalla Royalty Streaming or generate 12.05% return on investment over 90 days.

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

Performance Food Group  vs.  Metalla Royalty Streaming

Performance Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Performance Food Group 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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Metalla Royalty Streaming

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Metalla Royalty Streaming are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Metalla Royalty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Performance Food and Metalla Royalty

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

The idea behind Performance Food Group and Metalla Royalty Streaming 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.