Correlation Between Sumitomo Mitsui and United Natural
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui 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 Sumitomo Mitsui and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Mitsui Construction and United Natural Foods, you can compare the effects of market volatilities on Sumitomo Mitsui 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 Sumitomo Mitsui with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and United Natural.
Diversification Opportunities for Sumitomo Mitsui and United Natural
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and United is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction 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 Sumitomo Mitsui 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 Sumitomo Mitsui Construction 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 Sumitomo Mitsui i.e., Sumitomo Mitsui and United Natural go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and United Natural
Assuming the 90 days horizon Sumitomo Mitsui Construction is expected to under-perform the United Natural. But the stock apears to be less risky and, when comparing its historical volatility, Sumitomo Mitsui Construction is 3.07 times less risky than United Natural. The stock trades about -0.01 of its potential returns per unit of risk. The United Natural Foods is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 859.00 in United Natural Foods on August 28, 2024 and sell it today you would earn a total of 1,351 from holding United Natural Foods or generate 157.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. United Natural Foods
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| United Natural Foods |
Sumitomo Mitsui and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and United Natural
The main advantage of trading using opposite Sumitomo Mitsui and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui 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.| Sumitomo Mitsui vs. Beijing Media | Sumitomo Mitsui vs. Playa Hotels Resorts | Sumitomo Mitsui vs. G III Apparel Group | Sumitomo Mitsui vs. Columbia Sportswear |
| United Natural vs. DAIRY FARM INTL | United Natural vs. LION ONE METALS | United Natural vs. Sumitomo Mitsui Construction | United Natural vs. WIMFARM SA EO |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |