Correlation Between Pacific Ventures and US Foods

Can any of the company-specific risk be diversified away by investing in both Pacific Ventures and US Foods 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 Pacific Ventures and US Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pacific Ventures Group and US Foods Holding, you can compare the effects of market volatilities on Pacific Ventures and US Foods 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 Pacific Ventures with a short position of US Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Ventures and US Foods.

Diversification Opportunities for Pacific Ventures and US Foods

0.0

Correlation Coefficient

Pacific Ventures  US Foods

Pay attention - limited upside

The 3 months correlation between Pacific and USFD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Ventures Group and US Foods Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Foods Holding and Pacific Ventures 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 Pacific Ventures Group are associated (or correlated) with US Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Foods Holding has no effect on the direction of Pacific Ventures i.e., Pacific Ventures and US Foods go up and down completely randomly.

Pair Corralation between Pacific Ventures and US Foods

If you would invest (100.00) in Pacific Ventures Group on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Pacific Ventures Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pacific Ventures Group  vs.  US Foods Holding

Pacific Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pacific Ventures Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Pacific Ventures is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

US Foods Holding

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pacific Ventures and US Foods

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

The idea behind Pacific Ventures Group and US Foods Holding 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.