Correlation Between Vital Farms and Sysco

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

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

Diversification Opportunities for Vital Farms and Sysco

0.04

Correlation Coefficient

Vital Farms  Sysco

Significant diversification

The 3 months correlation between Vital and Sysco is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vital Farms and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco and Vital Farms 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 Vital Farms are associated (or correlated) with Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of Vital Farms i.e., Vital Farms and Sysco go up and down completely randomly.

Pair Corralation between Vital Farms and Sysco

Given the investment horizon of 90 days Vital Farms is expected to generate 2.96 times more return on investment than Sysco. However, Vital Farms is 2.96 times more volatile than Sysco. It trades about 0.14 of its potential returns per unit of risk. Sysco is currently generating about -0.01 per unit of risk. If you would invest  1,544  in Vital Farms on October 7, 2024 and sell it today you would earn a total of  2,419  from holding Vital Farms or generate 156.67% return on investment over 90 days.

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

Vital Farms  vs.  Sysco

Vital Farms

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vital Farms are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Vital Farms may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Sysco

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sysco are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Vital Farms and Sysco

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

The idea behind Vital Farms and Sysco 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.