Correlation Between Virtus Investment and Performance Food

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

By analyzing existing cross correlation between Virtus Investment Partners and Performance Food Group, you can compare the effects of market volatilities on Virtus Investment and Performance Food 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 Virtus Investment with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and Performance Food.

Diversification Opportunities for Virtus Investment and Performance Food

0.94

Correlation Coefficient

Virtus Investment  Performance Food

Almost no diversification

The 3 months correlation between Virtus and Performance is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Virtus Investment 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 Virtus Investment Partners are associated (or correlated) with Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Virtus Investment i.e., Virtus Investment and Performance Food go up and down completely randomly.

Pair Corralation between Virtus Investment and Performance Food

Assuming the 90 days horizon Virtus Investment Partners is expected to under-perform the Performance Food. In addition to that, Virtus Investment is 1.44 times more volatile than Performance Food Group. It trades about -0.34 of its total potential returns per unit of risk. Performance Food Group is currently generating about -0.16 per unit of volatility. If you would invest  8,400  in Performance Food Group on September 23, 2024 and sell it today you would lose (300.00) from holding Performance Food Group or give up 3.57% of portfolio value over 90 days.

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

Virtus Investment Partners  vs.  Performance Food Group

Virtus Investment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Investment Partners are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Virtus Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Performance Food

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Performance Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Virtus Investment and Performance Food

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

The idea behind Virtus Investment Partners and Performance Food 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.