Correlation Between US Foods and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both US Foods and EVS Broadcast 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 US Foods and EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Foods Holding and EVS Broadcast Equipment, you can compare the effects of market volatilities on US Foods and EVS Broadcast 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 US Foods with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Foods and EVS Broadcast.
Diversification Opportunities for US Foods and EVS Broadcast
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UFH and EVS is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding US Foods Holding and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment and US Foods 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 US Foods Holding are associated (or correlated) with EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of US Foods i.e., US Foods and EVS Broadcast go up and down completely randomly.
Pair Corralation between US Foods and EVS Broadcast
Assuming the 90 days horizon US Foods Holding is expected to generate 1.34 times more return on investment than EVS Broadcast. However, US Foods is 1.34 times more volatile than EVS Broadcast Equipment. It trades about 0.14 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.1 per unit of risk. If you would invest 5,750 in US Foods Holding on October 21, 2024 and sell it today you would earn a total of 850.00 from holding US Foods Holding or generate 14.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
US Foods Holding vs. EVS Broadcast Equipment
Performance |
Timeline |
US Foods Holding |
EVS Broadcast Equipment |
US Foods and EVS Broadcast Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with US Foods and EVS Broadcast
The main advantage of trading using opposite US Foods and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Foods position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.US Foods vs. Sysco | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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