Correlation Between Performance Food and Golden Entertainment
Can any of the company-specific risk be diversified away by investing in both Performance Food and Golden Entertainment 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 Golden Entertainment 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 Golden Entertainment, you can compare the effects of market volatilities on Performance Food and Golden Entertainment 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 Golden Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Golden Entertainment.
Diversification Opportunities for Performance Food and Golden Entertainment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and Golden is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Golden Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Entertainment 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 Golden Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Entertainment has no effect on the direction of Performance Food i.e., Performance Food and Golden Entertainment go up and down completely randomly.
Pair Corralation between Performance Food and Golden Entertainment
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.81 times more return on investment than Golden Entertainment. However, Performance Food Group is 1.24 times less risky than Golden Entertainment. It trades about 0.18 of its potential returns per unit of risk. Golden Entertainment is currently generating about 0.07 per unit of risk. If you would invest 6,950 in Performance Food Group on April 23, 2025 and sell it today you would earn a total of 1,450 from holding Performance Food Group or generate 20.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Performance Food Group vs. Golden Entertainment
Performance |
Timeline |
Performance Food |
Golden Entertainment |
Performance Food and Golden Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Performance Food and Golden Entertainment
The main advantage of trading using opposite Performance Food and Golden Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food position performs unexpectedly, Golden Entertainment 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 Golden Entertainment will offset losses from the drop in Golden Entertainment's long position.Performance Food vs. AGNC INVESTMENT | Performance Food vs. MidCap Financial Investment | Performance Food vs. New Residential Investment | Performance Food vs. Universal Display |
Golden Entertainment vs. NTT DATA | Golden Entertainment vs. WisdomTree Investments | Golden Entertainment vs. STORAGEVAULT CANADA INC | Golden Entertainment vs. Odyssean Investment Trust |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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