Correlation Between Sysco and Calavo Growers

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

By analyzing existing cross correlation between Sysco and Calavo Growers, you can compare the effects of market volatilities on Sysco and Calavo Growers 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 Sysco with a short position of Calavo Growers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sysco and Calavo Growers.

Diversification Opportunities for Sysco and Calavo Growers

0.7

Correlation Coefficient

Sysco  Calavo Growers

Poor diversification

The 3 months correlation between Sysco and Calavo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sysco and Calavo Growers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calavo Growers and Sysco 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 Sysco are associated (or correlated) with Calavo Growers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calavo Growers has no effect on the direction of Sysco i.e., Sysco and Calavo Growers go up and down completely randomly.

Pair Corralation between Sysco and Calavo Growers

Considering the 90-day investment horizon Sysco is expected to generate 0.6 times more return on investment than Calavo Growers. However, Sysco is 1.68 times less risky than Calavo Growers. It trades about -0.03 of its potential returns per unit of risk. Calavo Growers is currently generating about -0.09 per unit of risk. If you would invest  7,659  in Sysco on November 29, 2024 and sell it today you would lose (215.00) from holding Sysco or give up 2.81% of portfolio value over 90 days.

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

Sysco  vs.  Calavo Growers

Sysco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sysco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sysco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Calavo Growers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calavo Growers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sysco and Calavo Growers

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

The idea behind Sysco and Calavo Growers 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.