Correlation Between Performance Food and Elmos Semiconductor

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

Diversification Opportunities for Performance Food and Elmos Semiconductor

0.0

Correlation Coefficient

Performance Food  Elmos Semiconductor

Pay attention - limited upside

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

Pair Corralation between Performance Food and Elmos Semiconductor

Given the investment horizon of 90 days Performance Food is expected to generate 1.42 times less return on investment than Elmos Semiconductor. In addition to that, Performance Food is 1.53 times more volatile than Elmos Semiconductor SE. It trades about 0.05 of its total potential returns per unit of risk. Elmos Semiconductor SE is currently generating about 0.1 per unit of volatility. If you would invest  7,164  in Elmos Semiconductor SE on October 7, 2024 and sell it today you would earn a total of  1,759  from holding Elmos Semiconductor SE or generate 24.55% return on investment over 90 days.

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

Performance Food Group  vs.  Elmos Semiconductor SE

Performance Food

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Performance Food may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Elmos Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Performance Food and Elmos Semiconductor

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

The idea behind Performance Food Group and Elmos Semiconductor SE 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.