Correlation Between Performance Food and Somnigroup International

Can any of the company-specific risk be diversified away by investing in both Performance Food and Somnigroup International 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 Somnigroup International 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 Somnigroup International, you can compare the effects of market volatilities on Performance Food and Somnigroup International 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 Somnigroup International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Somnigroup International.

Diversification Opportunities for Performance Food and Somnigroup International

0.62

Correlation Coefficient

Performance Food  Somnigroup International

Poor diversification

The 3 months correlation between Performance and Somnigroup is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group and Somnigroup International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Somnigroup International 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 Somnigroup International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Somnigroup International has no effect on the direction of Performance Food i.e., Performance Food and Somnigroup International go up and down completely randomly.

Pair Corralation between Performance Food and Somnigroup International

Given the investment horizon of 90 days Performance Food Group is expected to under-perform the Somnigroup International. But the stock apears to be less risky and, when comparing its historical volatility, Performance Food Group is 1.07 times less risky than Somnigroup International. The stock trades about -0.03 of its potential returns per unit of risk. The Somnigroup International is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,206  in Somnigroup International on August 1, 2025 and sell it today you would earn a total of  967.00  from holding Somnigroup International or generate 13.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Performance Food Group  vs.  Somnigroup International

Performance Food

Risk-Adjusted Performance

Weakest

Over the last 90 days Performance Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Performance Food is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Somnigroup International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Somnigroup International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, Somnigroup International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Performance Food and Somnigroup International

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

The idea behind Performance Food Group and Somnigroup International 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.