Correlation Between Performance Food and Sligro Food

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

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

Diversification Opportunities for Performance Food and Sligro Food

0.66

Correlation Coefficient

Performance Food  Sligro Food

Poor diversification

The 3 months correlation between Performance and Sligro is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and Performance Food 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 Performance Food Group are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Performance Food i.e., Performance Food and Sligro Food go up and down completely randomly.

Pair Corralation between Performance Food and Sligro Food

Assuming the 90 days trading horizon Performance Food is expected to generate 2.89 times less return on investment than Sligro Food. But when comparing it to its historical volatility, Performance Food Group is 1.13 times less risky than Sligro Food. It trades about 0.08 of its potential returns per unit of risk. Sligro Food Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,107  in Sligro Food Group on April 10, 2025 and sell it today you would earn a total of  315.00  from holding Sligro Food Group or generate 28.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Performance Food Group  vs.  Sligro Food Group

Performance Food

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Food Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Performance Food may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sligro Food Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sligro Food Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sligro Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Performance Food and Sligro Food

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

The idea behind Performance Food Group and Sligro 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.