Correlation Between Procter Gamble and Performance Food

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

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

Diversification Opportunities for Procter Gamble and Performance Food

-0.14

Correlation Coefficient

Procter Gamble  Performance Food

Good diversification

The 3 months correlation between Procter and Performance is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food and Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Performance Food go up and down completely randomly.

Pair Corralation between Procter Gamble and Performance Food

Allowing for the 90-day total investment horizon Procter Gamble is expected to under-perform the Performance Food. But the stock apears to be less risky and, when comparing its historical volatility, Procter Gamble is 1.64 times less risky than Performance Food. The stock trades about -0.08 of its potential returns per unit of risk. The Performance Food Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  8,835  in Performance Food Group on July 1, 2025 and sell it today you would earn a total of  1,595  from holding Performance Food Group or generate 18.05% return on investment over 90 days.

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

Procter Gamble  vs.  Performance Food Group

Procter Gamble

Risk-Adjusted Performance

Weakest

Over the last 90 days Procter Gamble has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Procter Gamble is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Performance Food

Risk-Adjusted Performance

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 rather weak technical and fundamental indicators, Performance Food exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Procter Gamble and Performance Food

The main advantage of trading using opposite Procter Gamble and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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 Procter Gamble 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.