Correlation Between Olam International and US Foods
Can any of the company-specific risk be diversified away by investing in both Olam International and US Foods 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 Olam International and US Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olam International Limited and US Foods Holding, you can compare the effects of market volatilities on Olam International and US Foods 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 Olam International with a short position of US Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olam International and US Foods.
Diversification Opportunities for Olam International and US Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Olam and USFD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Olam International Limited and US Foods Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Foods Holding and Olam International 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 Olam International Limited are associated (or correlated) with US Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Foods Holding has no effect on the direction of Olam International i.e., Olam International and US Foods go up and down completely randomly.
Pair Corralation between Olam International and US Foods
If you would invest (100.00) in Olam International Limited on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Olam International Limited or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Olam International Limited vs. US Foods Holding
Performance |
| Timeline |
| Olam International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| US Foods Holding |
Olam International and US Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olam International and US Foods
The main advantage of trading using opposite Olam International and US Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olam International position performs unexpectedly, US Foods 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 US Foods will offset losses from the drop in US Foods' long position.| Olam International vs. Boston Omaha Corp | Olam International vs. Innovid Corp | Olam International vs. Organic Sales and | Olam International vs. Falcon Metals Limited |
| US Foods vs. Big Lots | US Foods vs. Aquagold International | US Foods vs. Thrivent High Yield | US Foods vs. Morningstar Unconstrained Allocation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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