Correlation Between US Foods and Pacific Ventures

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Can any of the company-specific risk be diversified away by investing in both US Foods and Pacific Ventures 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 Pacific Ventures 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 Pacific Ventures Group, you can compare the effects of market volatilities on US Foods and Pacific Ventures 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 Pacific Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Foods and Pacific Ventures.

Diversification Opportunities for US Foods and Pacific Ventures

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between US Foods and Pacific Ventures

If you would invest  6,977  in US Foods Holding on November 28, 2024 and sell it today you would earn a total of  88.00  from holding US Foods Holding or generate 1.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

US Foods Holding  vs.  Pacific Ventures Group

 Performance 
       Timeline  
US Foods Holding 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in US Foods Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.
Pacific Ventures 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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 and Pacific Ventures Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with US Foods and Pacific Ventures

The main advantage of trading using opposite US Foods and Pacific Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Foods position performs unexpectedly, Pacific Ventures 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 Pacific Ventures will offset losses from the drop in Pacific Ventures' long position.
The idea behind US Foods Holding and Pacific Ventures Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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