Correlation Between Performance Food and Life On

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

Diversification Opportunities for Performance Food and Life On

0.0

Correlation Coefficient

Performance Food  Life On

Pay attention - limited upside

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

Pair Corralation between Performance Food and Life On

If you would invest (100.00) in Life On Earth on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Life On Earth 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

Performance Food Group  vs.  Life On Earth

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 latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Life On Earth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Life On Earth has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Life On is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Performance Food and Life On

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

The idea behind Performance Food Group and Life On Earth 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.