Correlation Between BIORA THERAPEUTNEW and Performance Food

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

By analyzing existing cross correlation between BIORA THERAPEUTNEW 001 and Performance Food Group, you can compare the effects of market volatilities on BIORA THERAPEUTNEW 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 BIORA THERAPEUTNEW with a short position of Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIORA THERAPEUTNEW and Performance Food.

Diversification Opportunities for BIORA THERAPEUTNEW and Performance Food

0.77

Correlation Coefficient

BIORA THERAPEUTNEW  Performance Food

Poor diversification

The 3 months correlation between BIORA and Performance is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding BIORA THERAPEUTNEW 001 and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and BIORA THERAPEUTNEW 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 BIORA THERAPEUTNEW 001 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 BIORA THERAPEUTNEW i.e., BIORA THERAPEUTNEW and Performance Food go up and down completely randomly.

Pair Corralation between BIORA THERAPEUTNEW and Performance Food

Assuming the 90 days trading horizon BIORA THERAPEUTNEW 001 is expected to generate 29.86 times more return on investment than Performance Food. However, BIORA THERAPEUTNEW is 29.86 times more volatile than Performance Food Group. It trades about 0.03 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.06 per unit of risk. If you would invest  622.00  in BIORA THERAPEUTNEW 001 on September 29, 2024 and sell it today you would lose (112.00) from holding BIORA THERAPEUTNEW 001 or give up 18.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.17%
Values	Daily Returns

BIORA THERAPEUTNEW 001  vs.  Performance Food Group

BIORA THERAPEUTNEW 001

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days BIORA THERAPEUTNEW 001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, BIORA THERAPEUTNEW reported solid returns over the last few months and may actually be approaching a breakup point.

Performance Food

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Performance Food unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BIORA THERAPEUTNEW and Performance Food

The main advantage of trading using opposite BIORA THERAPEUTNEW and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIORA THERAPEUTNEW 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 BIORA THERAPEUTNEW 001 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.