Correlation Between High Liner and United Natural
Can any of the company-specific risk be diversified away by investing in both High Liner and United Natural 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 High Liner and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Liner Foods and United Natural Foods, you can compare the effects of market volatilities on High Liner and United Natural 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 High Liner with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and United Natural.
Diversification Opportunities for High Liner and United Natural
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between High and United is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods and High Liner 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 High Liner Foods are associated (or correlated) with United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of High Liner i.e., High Liner and United Natural go up and down completely randomly.
Pair Corralation between High Liner and United Natural
Assuming the 90 days horizon High Liner Foods is expected to under-perform the United Natural. In addition to that, High Liner is 1.1 times more volatile than United Natural Foods. It trades about -0.02 of its total potential returns per unit of risk. United Natural Foods is currently generating about 0.14 per unit of volatility. If you would invest 2,628 in United Natural Foods on November 4, 2024 and sell it today you would earn a total of 197.00 from holding United Natural Foods or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. United Natural Foods
Performance |
| Timeline |
| High Liner Foods |
| United Natural Foods |
High Liner and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and United Natural
The main advantage of trading using opposite High Liner and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, United Natural 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 United Natural will offset losses from the drop in United Natural's long position.| High Liner vs. Tencent Music Entertainment | High Liner vs. WisdomTree Investments | High Liner vs. BOS BETTER ONLINE | High Liner vs. SALESFORCE INC CDR |
| United Natural vs. CSSC Offshore Marine | United Natural vs. CANON MARKETING JP | United Natural vs. Tradegate AG Wertpapierhandelsbank | United Natural vs. BW OFFSHORE LTD |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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